What Is the Role of a Silent Partner in Business?

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.

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.