General partnership: liability (art. 125 LGS)
In a general partnership, partners bear subsidiary, unlimited and joint-and-several liability for company obligations; any agreement to the contrary is ineffective against third parties.
What article 125
Article 125 characterizes the general partnership by the partners’ subsidiary, unlimited and joint-and-several liability.
The partners incur subsidiary, unlimited and joint-and-several liability for the company’s obligations. Any agreement to the contrary may not be asserted against third parties.
Source: Law 19,550, art. 125 — InfoLEG (updated official text)
Commentary
The general partnership is the classic personal partnership: partners ultimately answer with their own assets for company debts. Liability is subsidiary, but unlimited and joint and several among the partners.
An internal agreement limiting that liability may bind the partners inter se but not third parties. Because of this personal exposure, the form is now used far less often than the SRL or stock corporation.
Distinctions often confused
Practical impact
Choosing a general partnership exposes the partners’ personal assets. In most cases, that exposure should be weighed against limited-liability forms.
Frequently asked questions
How are partners in a general partnership liable?
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