For example, when the business is just beginning, one partner may have skills that are valuable to the business, but little capital. Another partner may have capital, but not the requisite skills. The partner with skills can contribute services to the partnership while the other partner contributes capital. Later, when the business has grown, new partners can be admitted, yet their management capacity can be limited to prevent the new partners from usurping the original partners. When a partner contributes capital to a partnership, the partner receives an ownership percentage in all assets of the partnership, not just in the property contributed.
All partners are jointly and severally liable for the obligations of the partnership.
Joint and several liability means that each individual partner can be held responsible for all obligations of the partnership. A partner who pays an entire obligation can collect the other partners' pro rata share of the debt. Of course, the other partners may not be in a position to repay the partner. Any partner can enter into a contract on behalf of the partnership. By doing so, a partner can bind all partners in an unfavorable contract, since all partners are jointly and severally liable for the obligations of the partnership.