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Silent Partnership Agreement

If you are setting up a new partnership, or trying to bring in new investors as silent partners into an existing business, a Silent Partnership Agreement can help outline everyone's interest in a... Read More

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Making a Silent Partnership Agreement

  • What is a Silent Partnership Agreement?

    If you are setting up a new partnership, or trying to bring in new investors as silent partners into an existing business, a Silent Partnership Agreement can help outline everyone's interest in a legally binding document. This agreement allows for the silent partner to share in the gains and losses of the venture while playing less of a role in day-to-day management of the company. The addition of a silent partner can be great for you and your business if the partner is capable of offering guidance as necessary and an infusion of capital.

  • Who is a silent partner?

    A silent partner is an individual whose main contribution to a business is in the form of capital. A silent partner is not usually involved in the partnership's day-to-day operations, hence the term "silent." Silent partners typically enjoy limited liability, and are exposed only to the extent of their investment in the business. Being a silent partner may be a great option for investors who want to enjoy the passive income generated from a growing business, but don't want to get involved in how the business is managed.

  • What should a Silent Partnership Agreement include?

    A Silent Partnership Agreement may include the following:

    • Information about the partnership, including name, place and purpose
    • Term of the partnership
    • Percentage of ownership in the business
    • Specific contributions to be made by each Partner
    • How additional contributions are handled by the partnership

    All of these terms and more are included in the Rocket Lawyer Silent Partnership Agreement.

  • How do I write a Silent Partnership Agreement?

    You can use the Rocket Lawyer Silent Partnership Agreement if:

    • You are welcoming a silent partner to your company.
    • You are a silent partner entering into a business.
    • You manage a business that has silent partners.

    The Rocket Lawyer document builder will help you create a custom Silent Partnership Agreement tailored to your needs.

  • Where can I get a Silent Partnership Agreement?

    You can create your own customized Silent Partnership Agreement with Rocket Lawyer. Choose your state and click on the Make Document button to begin creating your own document. You will be prompted to answer some questions about your agreement. Here are some questions for you to consider before you start your document:

    • Who's responsible for management?
    • What percentage of the business does the silent partner own?
    • How do you want to handle liabilities?
    • How do you want to handle profits?
    • Will the silent partner contribute anything non-financial?

    There are many important considerations, and they will have a lasting impact on your business. Establishing a Silent Partnership Agreement can help every partner, and the business, succeed for years to come.

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