If a partner contributes capital but does not participate in management, they ar

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Question: If a partner contributes capital but does not participate in management, they are known as a:

Options:

Correct Answer: Silent partner

Solution:

A silent partner contributes capital but does not take part in the management of the business.

If a partner contributes capital but does not participate in management, they are known as a:

If a partner contributes capital but does not participate in management, they are known as a:

Step 1: Understand that a partner in a business can have different roles.
Step 2: Identify what it means to contribute capital - this means putting money into the business.
Step 3: Recognize that some partners may not want to be involved in making decisions or managing the business.
Step 4: Learn the term for a partner who gives money but does not manage - this is called a 'silent partner'.
Step 5: Conclude that a silent partner contributes capital but does not take part in the management of the business.

Silent Partner – A partner who contributes capital to a business but does not engage in its management.