An equity partner is a partner in a partnership who is a part owner of the business, and is entitled to a proportion of the distributable profits of the partnership. The term is used in contra-distinction to a salaried partner (or contract partner) who is paid a salary but does not have any underlying ownership interest in the business and will not share in the distributions of the partnership (although it is quite common for salaried partners to receive a bonus based on the firm's profitability).
Although they are both regarded as partners, in legal and economic terms, equity partners and salaried partners have little in common other than joint and several liability. The degree of control which each type of partner exerts over the partnership depends on the relevant partnership agreement.
The division between equity and salaried partners could, in theory, occur in any partnership, but in practice, the distinction is most frequently referred to in law firms and accountancy firms.
Read more about Equity Partner: Type of Equity Partnership
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