The Silent Partner Agreement is a crucial legal document used in New Zealand business contexts when establishing a partnership where one party wishes to invest capital while maintaining confidentiality and avoiding operational involvement. This agreement is particularly relevant in situations where businesses seek additional funding without diluting operational control or when investors want to participate in business profits while limiting their liability and public exposure. The document must comply with New Zealand's Partnership Law Act 2019 and related legislation, including financial markets regulations and privacy laws. It typically includes detailed provisions for capital contribution, profit sharing, management restrictions, confidentiality obligations, and exit mechanisms, while ensuring the silent partner's rights are protected despite their non-participation in business operations.

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

2. Background: Explains the context of the agreement, including the business purpose and intention to form a silent partnership

3. Definitions: Defines key terms used throughout the agreement

4. Partnership Structure: Outlines the nature of the silent partnership and the roles of each party

5. Capital Contribution: Details the silent partner's investment amount and any terms related to additional capital contributions

6. Profit and Loss Sharing: Specifies the profit-sharing ratio and how losses will be handled

7. Management and Control: Clarifies that the active partner(s) have exclusive management rights and the silent partner's non-involvement in operations

8. Confidentiality: Establishes obligations to maintain the confidentiality of the silent partner's identity and involvement

9. Financial Records and Reporting: Details the financial information to be provided to the silent partner and reporting frequency

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

11. Distribution of Assets: Explains how assets will be distributed upon dissolution or termination

12. Representations and Warranties: Contains statements of fact and promises made by both parties

13. Governing Law: Specifies that New Zealand law governs the agreement

14. Dispute Resolution: Outlines the process for resolving disputes between partners