The correct answer is: B. Unlimited
A partner’s liability in a general partnership is unlimited. This means that a partner is personally liable for the debts of the partnership, even if the partner has not contributed any capital to the partnership. A partner’s personal assets, such as their home and car, can be used to satisfy the partnership’s debts.
There are a few exceptions to the rule of unlimited liability. For example, a partner may be able to limit their liability if they are a limited partner in a limited partnership. However, these exceptions are limited and it is important to consult with an attorney to determine if you may be able to limit your liability.
It is important to understand the risks of unlimited liability before entering into a general partnership. If you are not comfortable with the risks, you may want to consider a different type of business structure, such as a corporation or a limited liability company.
Here is a brief explanation of each option:
- Option A: Limited up to the amount of his capital in the business. This option is incorrect because a partner’s liability in a general partnership is unlimited.
- Option B: Unlimited. This option is correct because a partner’s liability in a general partnership is unlimited.
- Option C: Limited up to the amount of guarantee given by the partner. This option is incorrect because a partner’s liability in a general partnership is unlimited, regardless of whether or not the partner has given a guarantee.
- Option D: Limited up the amount of his capital and loan to the firm if any. This option is incorrect because a partner’s liability in a general partnership is unlimited, regardless of the amount of capital or loans the partner has made to the firm.