Sleeping Partner in a Business Partnership
Introduction In the realm of business partnerships, a "sleeping partner," also known as a "silent partner," refers to an individual who invests capital into a partnership but does not take an active role in managing the business. Unlike active partners who are involved in the daily operations and decision-making processes, a sleeping partner's involvement is primarily financial. Despite their lack of participation in the day-to-day running of the business, sleeping partners play a crucial role by providing the necessary capital, which can be vital for the growth and stability of the partnership. Rights of a Sleeping Partner 1. Right to Profits: A sleeping partner is entitled to a share of the profits generated by the business. This share is typically proportional to their investment in the partnership, as agreed upon in the partnership deed or agreement. 2. Right to Information: Although they do not actively manage the business, a sleeping partner has the right ...