What Is the Role of a Silent Partner in Business?


Quick Answer

A silent partner in a business partnership is a behind-the-scenes investor, someone who does not take an active role in the company's management. This person's identity might be completely unknown, thus the "silent" designation.

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Full Answer

Silent partners are partners, nonetheless, and as such are entitled to a company's profits.

Business structures that are set up as limited partnerships have one member classified as a limited partner who is a silent partner. These individuals assume limited liability, meaning any losses the company incurs will not affect more than what they have personally contributed to the company. In exchange, they take a hands-off approach to the actual running of the company, leaving it to the general partner to do that.

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