Home » Business Stationary » Silent Partnership Contract Guidelines

Silent Partnership Contract Guidelines

A silent partnership agreement is a legal contract between two or more partners or companies, in which one partner or company is known as a silent partner. The silent partner or the sleeping partner  is mostly the investor, but do not take any part in the management area or daily affairs of the business. Mostly he is prohibited to take any important business decisions. He is mostly unknown to the clients. The silent partner share all the loses and benefits fully of the business, as the other partner.

Terms and Conditions of the Silent Partnership Contract

  • A silent partnership is almost like other basic partnerships with few exceptions, which should be added in the form of conditions and provisions in the agreement in clear and simple words.
  • Usually the silent partner provide capital money for the business, so the amount of money and the schedule of money installments should be  mentioned in detail in the silent partnership agreement.
  • It should be clearly stated that the silent partner is equally responsible for the losses or profits of the particular company.
  • The agreement should declare the obligations and responsibilities of all the involved parties openly to avoid confusion.
  • It should be stated as well that the silent partner has no right to interfere in the management area to avoid dispute.
  • Authority of the working party should be recognized in the contract.
  • Profit and loss percentage of each party or company should be decided in the contract.
  • If the other party is also investing money equally or in a smaller portion, should be mentioned accordingly.
  • The sleeping partner has the right to withdraw from the partnership, if it does not work.
  • It should be cleared in the contract that no salary or compensation  is recommended for the working partner.
  • The provision of terminating the agreement in case of bankruptcy or death of any partner should be definitely added to the contract.

No doubt, it always help if you can get your hands with some real world contracts. On such source, could be to download high quality but free contract templates online.

Common Mistakes in Silent Partnership Contract

  • Mostly silent partners do not have any experience, it’s better if they do not interfere in the business decision making affairs according to the contract.
  • The provision of providing the money installments in due time should be added in the agreement.
  • The partners with their names,  particular status in the business and rights should be mentioned in the agreement in detail.
  • Expectations and obligations is the area which should also be addressed very carefully.
  • Provision of termination should be introduced in a fair and realistic way.

Tips for a Effective Silent Partnership Contract

  • Every detail should be in the written form to have a safe business.
  • Silent partnership agreement is a legal document, you must take guidance from a legal expert to avoid mistakes.
  • Your first final copy of agreement should be checked by your legal attorney before anyone else.
  • Real estate business is for sure profitable,  for a person who wants to be a silent partner.

 

Related Posts:

  • 5 Free Maintenance Contracts – Samples and Templates5 Free Maintenance Contracts – Samples and Templates Most builders cannot articulate the long term functionality and security of the construction in their buildings, therefore a proper maintenance is mandatory to keep a check on vulnerable damages. Maintenance of the Building means, the building should possess the basic security and cleanliness. Therefore it is necessary for the constructer to implement the maintenance plans for a secure […]
  • How to do Quarterly Budget Analysis?How to do Quarterly Budget Analysis? Proper financial management is vital element behind success of every business establishment or company that enables business management or organization meets the financial goals of having a profitable year. Quarterly budget analysis is one of the most effectual budgeting processes that can help you create a financial plan for your business establishment or company that can help […]
  • 11 Elements of a Job Description Form11 Elements of a Job Description Form If we were to put together a formula to come up with an ideal job, the equation will state the value structure plus skill plus workplace first choice equals to a perfect job. You must add some entertaining element as a catalyst to accelerate this ideal job formula. The job should contain some challenging factors which an employee loves to dare. A valid and well-composed job description […]
  • Ideas for Tea Party InvitationIdeas for Tea Party Invitation Life has become busy these days. You just do not find enough time to just sit back and catch up with your friends. Tea parties provide an opportunity to get out of the daily routine and plan something together with your friends. So are you tired of your daily routine life and want a break? Do you want an opportunity to gather all your friends for some light talks and do nothing more […]
  • Importance of Appointment ScheduleImportance of Appointment Schedule In Business and Organizational world, you have to cope with appointments of several types including job interviews, business meetings, one on one appointment with employees etc. Whatever the types of meetings and appointments you have to accomplish, you can perfectly do this making a proper schedule and planning. It is the best way to save your time and accommodate your time into […]
  • Importance of Prize VouchersImportance of Prize Vouchers Prize vouchers are available on different occasions especially near Christmas and New Year. Usually a voucher is used in business for the promotion of particular products. Sometime when a company launches his new product, they take help of prize vouchers for the sale of their product. Prize vouchers can't be redeemed directly but you have to shop for some specific limit through the […]
  • Importance of Tax ReceiptsImportance of Tax Receipts Tax receipts are such documents that are created and managed by taxation department and authority. The main purpose of creating tax receipt is to maintain all information and records of tax transactions. Taxation department or authority keeps engaging in managing finances and tax receipts are very helpful to manipulate financial records regarding tax transactions. Taxing transactions […]
  • 3 Free Lunch Menu Templates3 Free Lunch Menu Templates Menu that has food items specially designed for lunch time are lunch menus. Lunch menus can be prepared for weeks and months. Those prepared for a month can either be revised at the end of the month or can remain the same for the following month. Lunch menus are usually prepared for schools by their administration. Or office managements also go for preparation of lunch menus for office […]
  • Insurance BenefitsInsurance Benefits Insurance is a contract or policy for a stipulated consideration or premium in which one party secures to pay compensation the other for loss on particular subject by particular risks. A person can get insured for different types of policies like life insurance, travel insurance, home insurance, vehicle insurance, property insurance, health insurance etc. Each type of insurance policy […]
  • Career Salary Survey Market PracticesCareer Salary Survey Market Practices Whenever you want to apply for a new job, among the first things that come to your mind is how much you are going to make on that job. No matter how much you say that you are in the work because you love it or you can’t stay away from the office but money and income is a very important factor too. This is what most people think of when they want to change or go in a new field of work. […]

Leave a Reply

Your email address will not be published. Required fields are marked *

*