Silent Partnership Agreement

Managing Partner: [Name] · Silent Partner: [Name] · Business: [Business Name] · Date: [Date]

1. Contribution

Silent Partner contributes [Amount/Assets] to the business in exchange for a [%] share of profits, as described below.

2. Role

Managing Partner retains full authority over day-to-day business operations and decision-making. Silent Partner has no management role or authority to bind the business, and is not involved in daily operations.

3. Profit and Loss Sharing

Silent Partner receives [%] of net profits, distributed [Frequency]. [State whether Silent Partner also shares in losses proportionally, or whether their exposure is limited to their initial contribution.]

4. Information Rights

Silent Partner is entitled to receive [Frequency] financial statements and may inspect business records upon reasonable request, but has no authority to direct business decisions.

5. Liability

[State whether Silent Partner's liability is limited to their capital contribution — commonly the structure, but confirm the actual legal form (e.g. limited partner in an LP, or member of an LLC) that provides this protection.]

6. Exit/Buyout

[Describe how Silent Partner can exit — e.g. sell their interest, subject to Managing Partner's right of first refusal, or a buyout formula.]

7. Term

This Agreement continues until [Date/event] or is terminated per the exit provisions above.

Managing Partner: ______________________ Date: ____________ Silent Partner: ______________________ Date: ____________

*This document is provided for informational and educational purposes only and does not constitute legal advice. "Silent partner" limited liability isn't automatic just from staying out of day-to-day operations — it typically requires the arrangement to actually be structured as a limited partnership or LLC membership interest, not a general partnership, where every partner (silent or not) can be personally liable for business debts.*