In the event of partnership dissolution with a debt, how much is each partner liable for?

In a partnership, each partner has joint and several liabilities for the debts incurred by the business. This means that upon dissolution of the partnership, each partner can be held responsible for the entire amount of the partnership's debts, regardless of their individual investment or ownership percentage in the business.

This legal principle is designed to protect creditors, allowing them to pursue any partner for the full amount owed. Therefore, if a partnership is dissolved and there are outstanding debts, all partners might be required to satisfy those debts, either through liquidation of partnership assets or through personal assets if there's a shortfall.

The options concerning fixed amounts or ratios such as half, one-third, or only the amount each partner invested do not accurately reflect the responsibility outlined in partnership law regarding joint and several liabilities. This is why the understanding that each partner could potentially be liable for the entire debt is crucial in partnership agreements and financial planning.