DEFINITION of 'Active Partner'

An invested person who is involved in the daily operations of the partnership. An active partner helps run the business to enhance his or her returns and is therefore considered a material participant. This person typically shares more risk and return versus a limited or silent partner.

BREAKING DOWN 'Active Partner'

Because they are actively involved, an active partner is still exposed to unlimited liability as opposed to a silent partner whose liability is only their initial investment. In this arrangement, even innocent active partners can be held responsible if another partner commits illegal actions that involve the firm.

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RELATED FAQS
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  3. What's the difference between limited liability partnership and general partnership?

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