In a general partnership, what type of liability do general partners face?

In a general partnership, general partners are exposed to unlimited personal liability for the debts and obligations of the partnership. This means that if the partnership is unable to meet its financial obligations, creditors can pursue the personal assets of any general partner to satisfy the debt. The rationale behind this principle is that general partners have a fiduciary responsibility to the partnership and its creditors, and therefore they bear the full risk of its liabilities.

This feature distinguishes general partnerships from other business entities, such as limited partnerships or corporations, where liability can be restricted to the extent of the investment in the business or limited to the corporation's assets. In a general partnership, since all partners have the authority to act on behalf of the partnership and are involved in its management, they are equally responsible for its financial obligations.

The other options do not accurately reflect the liability framework of general partnerships. Limited liability for business debts, loyalty-based liability, and limiting liability to the investment amount do not apply to general partners in a general partnership, as all partners share the burden of liability for the partnership's debts without limitation.