Duhaime's Law Dictionary

Silent Partner Definition:

A person who invests in a company or partnership but does not take part in administering or directing the organization; he or she just shares in the profits or losses.

This is not strictly a legal word although it appears to refer to the concept of a limited partner; a partner not fully liable for his partners debts and liabilities, as general partners are to one another, but has his liability limited to the amount of his investment; hence, a limited partner.

However, as the notoriety of a partner's limited liability may be essential to maintaining that limitation, "silent" does not mean unknown or hidden. It means that the partner does not interfere in management ... remains silent!

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