You want to found a silent partnership?
What actually is a silent partnership?
A silent partnership is an ordinary partnership that is not outwardly recognizable.
What is an ordinary partnership?
An ordinary partnership is a contractual association between at least two people to achieve a joint purpose with joint means or effort. In other words: An ordinary partnership is founded whenever no other company is founded with the purpose of achieving a joint objective to which any person can contribute. This often is the case without the persons involved being aware of it. You bought a car together with your girlfriend to drive through Europe? Then you have formed an ordinary partnership. See our article on ordinary partnerships.
How else does a silent partnership differ from an ordinary partnership?
In the case of a silent partnership, a shareholder or principal shareholder represents the company externally and manages a sole proprietorship, for example. The fact that they pursue another purpose together with the other party involved in the silent partnership is not recognizable from the outside. For this reason, holdings of the silent partner go directly into the assets of the principal shareholder and not into the company assets of the silent partnership.
The silent partner is not liable for company liabilities.
When does it make sense to create an ordinary partnership?
On the one hand, this makes sense if the silent partner does not want to be visible or the principal company (in the example above the sole proprietorship) wants to maintain an unchanged outward appearance and does not want to involve any additional shareholders. As mentioned, the silent partner can also not be held liable for the liabilities of the silent partnership.
Further details of this company form as well as a sample contract for founding such a company are provided below.