The Ruling on Making a Debt the Capital of a Partnership
Machine translationRead the Arabic original
Question:
Honorable Shaykh, may Allah grant you success. This questioner says: I have a business, and a man asked me for a loan, but I did not have any money. So when he demanded the debt, I told him, “I have nothing right now, but I will make you a partner with me in the shares of my business in exchange for the debt.” Is this permissible? Knowing that the profit and loss are shared equally between us.
Answer:
A partnership cannot have a debt as its capital. It must be present cash. One does not enter a partnership with a debt; one enters it with present cash that he pays.
Honorable Shaykh, may Allah grant you success. This questioner says: I have a business, and a man asked me for a loan, but I did not have any money. So when he demanded the debt, I told him, “I have nothing right now, but I will make you a partner with me in the shares of my business in exchange for the debt.” Is this permissible? Knowing that the profit and loss are shared equally between us.
Answer:
A partnership cannot have a debt as its capital. It must be present cash. One does not enter a partnership with a debt; one enters it with present cash that he pays.
Source
شرح إغاثة اللهفان من مصائد الشيطان لابن القيم، فصل وقد أخبر - صلى لله عليه وسلم - أن طائفة من أمته تستحل الربا باسم البيع — islamhouse.com (49:06)
The Arabic text is a machine transcription of the audio recording.