Legal Definitions - special partner

Definition: A special partner is a type of partner in a business who receives profits from the business but does not take part in managing the business and is not liable for any amount greater than their original investment. They are also known as a limited partner.

Example: John invests $10,000 in a business with his friend, Sarah. John is a special partner because he does not take part in managing the business, but he receives a share of the profits. If the business incurs debts or liabilities, John is only liable for the $10,000 he invested and not for any additional amounts.

This example illustrates the definition of a special partner because John is not involved in the day-to-day operations of the business and is only responsible for the amount he invested. This type of partnership is common in businesses where one partner provides the capital, and the other partner manages the business.