Definition of silent partner

limited partner. Such partners are called silent because, unlike general partners, they have no direct role in management and no liability beyond their individual investments.

1. limited partner in a direct participation program, such as real estate and oil and gas limited partnerships, in which cash flow and tax benefits are passed directly through to shareholders. Such partners are called silent because, unlike general partners, they have no direct role in management and no liability beyond their individual investment.
2. general partner in a business who has no role in management but represents a sharing of the investment and liability. Silent partners of this type are often found in family businesses, where the intent is to distribute tax liability.