Ask AI: Which is the only kind of cooperation in which the directors have a legal responsibility for the obligations incurred by the firm

The type of business entity where the directors (or equivalent managing partners) have a legal responsibility for the obligations incurred by the firm is a **General Partnership**. In a general partnership, all partners share in the management of the business and each is personally liable for all the business's debts and obligations. This means that the personal assets of the general partners can be used to satisfy the debts and liabilities of the partnership. It's important to distinguish this from other types of business entities, such as: - **Limited Partnership (LP):** In this structure, there are both general partners (who are fully responsible) and limited partners (who are only liable up to the amount they invested). - **Limited Liability Partnership (LLP):** Partners in an LLP have limited liabilities, protecting their personal assets from the business's debts. - **Corporations:** Shareholders have limited liability, meaning they are not personally responsible for business debts. - **Limited Liability Company (LLC):** Members have limited liability protection. If personal liability is a concern, it’s advisable to consider these other business structures that offer limited liability protections. Consulting a legal or business advisor to choose the appropriate structure for your specific situation is also a good step.