What are the benefits of silence
What is a silent partner?
A silent partner is not a real partner in a company, but only a partner through its financial support. With his money he has the right to participate in the profit. The contribution does not necessarily have to consist of money, but can also be a contribution in kind or a service. According to the Commercial Code (HGB), the contribution of a silent partner is to be booked on a contribution account.
Liability of the silent partner
The silent partners is only liable according to his contribution. As a result, he is also not liable in the event of bankruptcy that exceeds his investment. However, this also brings with it a risk, as in the event of bankruptcy he can lose his entire deposit. For this reason, he has a limited right of control. This allows him to check the company's books for accuracy in order to protect himself against losing his investment.
Requirement for a silent partner
• Natural or legal person
• Typical or atypical type of participation
• A businessman, a freelancer cannot be a silent partner
• Limited or permanent partnership
What are the rights and obligations?
The rights and obligations of the silent partner are set out in the Commercial Code (HGB) and the German Civil Code (BGB). The rights are limited to profit sharing. Participation in the loss can be excluded in a contract. Normally, he also has no decision-making and co-determination rights. However, other agreements can be regulated by means of a partnership agreement. This allows the silent partner to have a say in some situations. In addition, he is not an employee of the company, only a donor. This is where the term "silent" comes from, since the deposit remains anonymous and there is no entry in the commercial register. In the event of bankruptcy, the silent partner takes on the position of a creditor.
Typical and atypical forms of participation
The difference between the atypical silent partner is that the partner actively participates in the management of the company. In this case, the entrepreneur also has co-determination and decision-making rights. If the partner participates as a co-entrepreneur, he also bears the entrepreneurial risk with the other partners. In these circumstances, he shares not only in the profit, but also in the loss in the event of a loss. In addition, liability in the event of atypical participation is often extended beyond the deposit. An atypical silent partner offers tax advantages, especially for the management. The purpose of the atypical silent partner is to combine the tax advantages of a partnership and the limited liability of a corporation.
Advantages of a quiet company
A silent partner is particularly suitable when founding a company. When founding a company, there are many investment costs that are usually not without external financing. Here, a silent partner is used to quickly and easily raise capital, as there is no repayment claim in contrast to a loan from a bank. In addition, there is no interest. It is also useful that the partner remains anonymous and only exists internally. There is therefore no need to add a real shareholder. In addition, the profit distribution is deductible as a business expense. The advantage for the investor is obvious as he can increase his money without having to do anything.
Quiet partner and its disadvantages
For the owner, the financial dependence on silent partners can be disadvantageous. For the partner, on the other hand, it is disadvantageous that he cannot influence the decisions of the company. It is also negative that in the event of bankruptcy, he can lose his entire investment.
Who can become a silent partner?
Basically, anyone can become a silent partner. The prerequisite for this is that he is able to provide money. He can determine the amount of the deposit himself; no minimum deposit is required.
Exclusion of a silent partner
If the silent partner's contribution is reduced due to the company's losses, there is no entitlement to repayment. Contributions in kind remain available to the company. Refunds will only be made for items given to the company for use.
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