How does partnership liability affect creditors?

Partnership liability significantly impacts creditors because, in a general partnership, all partners are personally liable for the debts and obligations incurred by the partnership. This includes the ability of creditors to pursue any individual partner for the full amount of the partnership's debts.

The principle of joint and several liabilities means that if the partnership cannot satisfy its debts, a creditor can go after any one partner individually for the complete amount owed, irrespective of each partner's individual contribution to the debt. This provides a safeguard for creditors, ensuring that they have recourse to multiple parties when seeking repayment.

In contrast to the other options, which suggest limitations on the creditor's ability to claim, this concept of joint liability is fundamental in partnerships and ensures that creditors have a wider net to recover debts. For example, if a creditor pursued only the partnership itself, they might face difficulties in recovery, particularly if the partnership is insolvent. Thus, the ability to pursue any partner individually bolsters the creditor's position and access to potential recovery sources.