When starting a business, it`s important to consider all available options for partnerships. One of these options is a silent partner agreement. This is an agreement where an investor invests in a business without any involvement in its day-to-day operations.

A silent partner agreement can be a great option for entrepreneurs who need funding but want to retain control over their business. This type of agreement is also ideal for investors who want to invest in a business but don`t have the time or desire to be involved in its management.

If you`re considering a silent partner agreement for your business, it`s important to have a clear and concise agreement in place. Here`s a sample silent partner agreement to help you get started:

1. Purpose: This section should state the purpose of the agreement, which is to provide funding to the business in exchange for a share of the profits.

2. Term: The agreement should specify the length of the partnership, which can be indefinite or for a specified period.

3. Capital Contribution: The agreement should state the amount of money the silent partner will invest in the business. This section should also detail how the funds will be dispersed and how often the silent partner will receive updates on the business`s financial performance.

4. Profit and Loss Distribution: This section should detail how profits and losses will be distributed between the business and the silent partner. Typically, a silent partner will receive a percentage of the profits based on their initial investment.

5. Management: This section should specify that the silent partner will not be involved in the day-to-day operations of the business. However, the agreement should also state that the silent partner will have the right to review financial statements and receive updates on the business`s performance.

6. Termination: The agreement should specify how the partnership can be terminated, and under what circumstances. This section should also detail what happens to the investment in the event of termination.

7. Confidentiality: This section should detail any confidentiality agreements between the business and the silent partner.

Before entering into a silent partner agreement, it`s important to consult with a lawyer and ensure that the agreement is legally binding and meets the needs of both parties. A well-crafted silent partner agreement can provide the financial support your business needs to succeed, while allowing you to maintain control over its operations.