My business partner spent all the profits from our business – does this mean I will have to pay the bills?#AskAMS

Partnerships are risky – particularly if you are in Partnership with the wrong person!

Sadly it could.  If your business is a Partnership, not a Limited Company or a Limited  Liability Partnership (LLP), all partners are “jointly and severally liable” for the debts of the Partnership.  So if there are no Partnership funds for the Partnership bills, the creditors can chase you personally for these debts – even though your partner took it out of the business. 

If your business is a Limited Company or an LLP, you are not personally liable for the debts of the business.  The monies at stake (and other assets) are limited to those owned by the business itself.  Exceptions would be if you had personally guaranteed a loan (sometimes banks seek such a guarantee); or if you have traded fraudulently, or while insolvent.