In NSW business partnership law, is each partner liable for 100% of debts?

That is correct. Partners in all partnership - not just NSW are jointly and severally liable.

This is my understanding: unless you have a partnership agreement, you are each severally and jointly liable for the debts of the partnership.

This can be a problem. For example, if the partnership folds owing $10,000. Partner #1 Joe Blow has no assets and no cash and cannot contribute to paying off the debt. Partner #2 Henny Penny has a $10,000 vehicle. It's her own car, she has never used it in relation to partnership business.

Whaddaya know - Joe gets off scot-free and Henny has to sell her ride.

That's why partnerships are best used only when we're talking small-time. Once you start making some serious dough, or at least look like you're going to start expanding, then you should look at some other options, like registering a company.

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