The full form of GP is General partner or General Partnership.
The general partner is a partner or member in a partnership who also has unlimited liability. This general partner is also liable for their portion of all the debts of the partnership.
The general partner is also called a member of the managing team or managing member and one of the members who are actively responsible for the partnership of management.
However, it’s not important to have just one general partner as there can be more than one general partner in any partnership.
All the members in a general partnership is a general partner. It indicates that all of these partners have unlimited liability for the activities of the partnership.
Because of this, a customer of that business can not only sue the partnership business but also to all the general partners for their personal assets. In this case, the general partners can lose all of their business assets as well as their business.
So a general partner holds the authority to take actions on behalf of the business even without any permission of other partners. The general partner or GP also shares the responsibilities and expenses of business operations as well as GP holds shares in the profit of the business.
The work of a general partnership is arranged with two or more general partners. These general partners are professionals in different entities. These general partners or professionals bring skills and specialized knowledge to the partnership and they contribute to its pool of contacts as well as clients.
The biggest disadvantage of being a general partner in a general partnership is that if one general partner is found to be guilty or being sued then all the other general partners are also held responsible in that case. So all the general partners can be sued and they have to share the financial responsibility also.
For instance, if in a medical general practice which is a general partnership a client sues a medical practitioner or doctor for malpractice then all the other general partners can also be sued. In this case, the court can allege malpractice to all those general partners.
GP key takeaways
These are the responsibilities and work of a general partner –
A general partner works as a part-owner of a particular business which is called a partnership and shares the profits.
One general partner in a business or general partnership can be liable for the debts of that business.
In most cases, these general partners are professionals such as doctors, lawyers, etc. who join the partnership to remain independent but they are also a part of a larger business.
About General partnership
These are features of a general partnership –
In a general partnership, partners should make a written agreement of partnership.
In a general partnership, all the partners hold unlimited liability which is subjecting to their personal assets to seizure in case the partnership becomes insolvent.
In comparison to a corporation, a general partnership is less expensive.
The general partnership is also like any other business which is made of two or more partners where each partner has shared in liabilities, debts, assets, etc.
What is the difference between a limited partner and a general partner?
A limited partner is a partner in a limited partnership. A limited partner is a partner who invests in a business but does not take part in day-to-day operations. On the other hand, a general partner is responsible for all kinds of liability, management, and operations. Limited partners are also called silent partners.
What are the duties of general partners?
These are prior duties of a general partner –
General partner share losses
GP accounts for private profits
GP does not claim remuneration
A general partner is responsible to indemnify losses.
How do general partners get paid?
General partners get an annual management fee of up to 2 per cent. This annual management fee is used to carry out all the admin duties, to cover expenses, and to overhead, and salaries.
Some other famous full forms of Gp
GP Full Form: General Public
GP Full Form: General Practice