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In general, a partner is a co-owner or investor in a business, called a partnership, who shares profits from that partnership with at least one other person and is involved with its operations. Partners are agents of the partnership and may enter into contracts on behalf of the partnership.

  • An active partner is an invested individual who participates in the day-to-day activities of the partnership. An active partner is comparable to a member of a board of directors who also serves in a day-to-day position at a company. In comparison to a silent partner, the active partner usually shares greater risk and reward.
  • A silent partner is a individual whose role in a partnership is limited to giving funds to the business, also known as a limited partnership. A silent partner is rarely involved in the day-to-day activities of a partnership and rarely attends management meetings. A silent partner may serve as an advisor even if they are not involved in day-to-day management.

[Last updated in April of 2022 by the Wex Definitions Team]