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General Partnerships - Legal Arrangement

General Partnerships

A general partnership is not a legal person, separate and distinct from its partners, but a legal arrangement. 

A partnership is a relationship between persons carrying on a business together with a view to profit.  The law in relation to partnerships has developed in recent years to allow partnerships to follow certain formalities to limit the liability of their partners or members.  In Guernsey these newer forms of partnership are limited partnerships and limited liability partnerships.  Traditional partnerships, which do not follow these formalities, are known as general partnerships to distinguish them from other forms of partnership.

The persons who enter into a general partnership agreement (the partners) are collectively called a firm.  Every partner in a firm is liable jointly and severally with the other partners for all the debts of the firm incurred while he or she is a partner.  Every partner must act in utmost good faith towards every other partner of the firm.

Guernsey general partnerships are governed by the Partnership (Guernsey) Law, 1995.