Which business form is an example of a business whose participants are jointly and severally liable?

• A. Corporation sole
• B. Not-for-profit corporation
• C. General partnership
• D. Joint venture

Answer: (C)

In a general partnership, the owners share control and profits, and each partner bears unlimited personal liability for the debts and obligations of the business. This means creditors can pursue any one partner for the full amount owed, and that partner can then seek contribution from the other partners. That combination—being personally liable for the whole debt and having the ability to pursue, individually, any partner—encapsulates joint and several liability.

Corporation sole and not-for-profit corporation are separate legal entities, so the individuals involved typically don’t face personal liability for the entity’s debts. A joint venture is a specific collaborative arrangement that can be structured in various ways; its liability depends on the chosen structure, but the straightforward, classic example that clearly demonstrates joint and several liability is a general partnership.