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foreign partnership involves two or more Partners conducting a business but one is only liable for his capital investment they are also called Silent Partnerships or limited liability Partnerships suppose John invests money in Joes ice cream shop the money helps Joe pay his staff and maintain equipment John does nothing to help run the ice cream shop but he receives a monthly share of its profits therefore John is earning a passive income from the ice cream shop Joe keeps John updated on the Shops finances and status but expects nothing more from him Johns investment risk is the chance Joes Ice Cream Shop fails and his investment receives no profit John is not liable if Joes ice cream shop racks up debt when all his trucks break down on the same day [Music]