Legal Definitions - dormant partner

A dormant partner is a type of partner in a business who shares in the profits but does not actively participate in the management of the business. They are also known as a silent partner.

John and Jane start a restaurant business together. John is the chef and manages the day-to-day operations, while Jane invests money into the business but does not participate in the management. Jane is a dormant partner in the business.

This example illustrates how a dormant partner contributes financially to a business but does not have an active role in running it.