Which term refers to an investor in a partnership who contributes capital but is not involved in day-to-day operations?

• A. Active partner
• B. Silent partner
• C. General partner
• D. Limited liability partner

Answer: (B)

In partnerships, some members invest capital while others manage the operations. A partner who provides the funding but does not take part in daily decision-making is described as a silent partner. This term highlights the passive role they play: they share in profits and losses according to the agreement, but they stay out of running the business. The active or general partner takes on day-to-day management and bears greater personal liability for the business. While a limited partner also contributes capital and doesn’t manage, the common label for the non-operating investor in everyday language is silent partner. A term like limited liability partner isn’t standard in partnership terminology.