Active Partner


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.

  1. Silent Partner

    An individual whose involvement in a partnership is limited to ...
  2. General Partner

    Owners of a partnership who have unlimited liability. A general ...
  3. General Partnership

    A arrangement by which partners conducting a business jointly ...
  4. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
  5. Limited Partner

    A partner in a partnership whose liability is limited to the ...
  6. Operating Cost

    Expenses associated with the maintenance and administration of ...
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