The Silent Partner Agreement is a specialized legal instrument used in Hong Kong business contexts when an investor wishes to participate financially in a business venture while maintaining limited liability and avoiding involvement in day-to-day operations. This document is particularly relevant when businesses seek capital investment without surrendering operational control, or when investors prefer to limit their exposure and involvement. The agreement must comply with Hong Kong's Partnership Ordinance and related legislation, carefully structuring the relationship to maintain the silent partner's limited liability status while protecting their investment interests. It typically includes detailed provisions for capital contribution, profit sharing, information rights, and exit mechanisms, while explicitly limiting the silent partner's management rights and obligations. This type of agreement is commonly used in various business ventures, from startups seeking initial funding to established businesses looking for expansion capital.

1. Parties: Identification of the active partner(s) and the silent partner, including full legal names and addresses

2. Background: Context of the partnership formation and brief description of the business venture

3. Definitions: Key terms used throughout the agreement including 'Silent Partner', 'Business', 'Capital Contribution', and 'Profit Share'

4. Partnership Structure: Legal structure of the partnership and confirmation of the silent partner's limited role

5. Capital Contribution: Details of the silent partner's investment amount, payment terms, and any future capital commitments

6. Profit Sharing and Losses: Formula and terms for distribution of profits and allocation of losses

7. Management and Control: Clear statement that silent partner has no management rights or control over business operations

8. Rights and Obligations: Specific rights of the silent partner including information rights and limitations on involvement

9. Confidentiality: Obligations regarding business information and partnership details

10. Term and Termination: Duration of the agreement and circumstances for termination

11. Representations and Warranties: Standard declarations by all parties regarding their capacity and authority

12. Governing Law and Jurisdiction: Specification of Hong Kong law and jurisdiction

13. General Provisions: Standard boilerplate clauses including notices, amendments, and severability