When a partnership or sole trader business fails, the partners or sole trader, respectively, are fully responsible for all of the business' liabilities, or debts.

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In a partnership or sole trader business, the owners are personally liable for all the business' debts and liabilities. This means that if the business fails, the partners or sole trader can be pursued for the unpaid debts. They may have to sell personal assets to pay off business debts.

When a Partnership or Sole Trader Business Fails, the Partners