What is the ruling on a partnership in trade where one party contributes capital and the other contributes labor?
Machine translationRead the Arabic original
The questioner : Our Shaykh, another question.
The Shaykh: Go ahead.
The questioner : Now, if a person, for example, wants to partner with another person in sheep, in raising sheep.
The Shaykh : Yes.
The questioner : One person with his labor and the other with the capital.
The Shaykh: Yes.
The questioner : After a period of one or two years, they wanted to dissolve this partnership.
The Shaykh : Yes.
The questioner : Is the capital divided between them along with the profit, or how is it done?
The Shaykh : According to what they had agreed upon.
The questioner : According to the agreement.
The Shaykh : Is this profit divided equally, or in a fourth, or in a third, or whatever else?
The questioner : No, my Shaykh, excuse me.
The Shaykh : Hmm.
The questioner : What I mean is, the capital, for example, let us suppose that the capital is to be divided between the two, or does the capital remain with its owner and the profit is divided?
The Shaykh : It is this.
The questioner: Yes.
The Shaykh : The capital remains with its owner, because he is the one who is doing the *mudarabah* with his work. So, as I mentioned earlier, whether it is an equal share or a fourth, he takes the half or the third of the profit according to the agreement.
The questioner: Yes.
The Shaykh : As for the capital, it returns to its owner.
The questioner : If the agreement is also regarding the capital, that is permissible.
The Shaykh : How do you mean?
The questioner : I mean, if they agree to divide even the capital, meaning everything is divided, and finally the half, meaning after the dissolution of the partnership.
The Shaykh : Yes.
The questioner : They agreed on the basis that everything is divided in half.
The Shaykh : That does not happen, Abu Abdullah, because in that case, it would become *riba*. Suppose now that we enlarge the problem to make it clear. Suppose that this partnership was not successful.
The questioner: Yes.
The Shaykh : Meaning the profit was negligible or there was no profit.
The questioner: Yes.
The Shaykh : If it is stipulated that half of the money is divided, dividing the capital equally means that the *mudarib* will take half of the money for nothing.
The questioner : ... .
The Shaykh : And the owner of the capital will lose half of the capital.
The questioner: Yes.
The Shaykh : This is not permissible.
The questioner : May Allah reward you with good, my Shaykh.
The Shaykh : Welcome.
The questioner : Peace be upon you and Allah's mercy.
The Shaykh : And upon you be peace, and the mercy of Allah and His blessings.
The Shaykh: Go ahead.
The questioner : Now, if a person, for example, wants to partner with another person in sheep, in raising sheep.
The Shaykh : Yes.
The questioner : One person with his labor and the other with the capital.
The Shaykh: Yes.
The questioner : After a period of one or two years, they wanted to dissolve this partnership.
The Shaykh : Yes.
The questioner : Is the capital divided between them along with the profit, or how is it done?
The Shaykh : According to what they had agreed upon.
The questioner : According to the agreement.
The Shaykh : Is this profit divided equally, or in a fourth, or in a third, or whatever else?
The questioner : No, my Shaykh, excuse me.
The Shaykh : Hmm.
The questioner : What I mean is, the capital, for example, let us suppose that the capital is to be divided between the two, or does the capital remain with its owner and the profit is divided?
The Shaykh : It is this.
The questioner: Yes.
The Shaykh : The capital remains with its owner, because he is the one who is doing the *mudarabah* with his work. So, as I mentioned earlier, whether it is an equal share or a fourth, he takes the half or the third of the profit according to the agreement.
The questioner: Yes.
The Shaykh : As for the capital, it returns to its owner.
The questioner : If the agreement is also regarding the capital, that is permissible.
The Shaykh : How do you mean?
The questioner : I mean, if they agree to divide even the capital, meaning everything is divided, and finally the half, meaning after the dissolution of the partnership.
The Shaykh : Yes.
The questioner : They agreed on the basis that everything is divided in half.
The Shaykh : That does not happen, Abu Abdullah, because in that case, it would become *riba*. Suppose now that we enlarge the problem to make it clear. Suppose that this partnership was not successful.
The questioner: Yes.
The Shaykh : Meaning the profit was negligible or there was no profit.
The questioner: Yes.
The Shaykh : If it is stipulated that half of the money is divided, dividing the capital equally means that the *mudarib* will take half of the money for nothing.
The questioner : ... .
The Shaykh : And the owner of the capital will lose half of the capital.
The questioner: Yes.
The Shaykh : This is not permissible.
The questioner : May Allah reward you with good, my Shaykh.
The Shaykh : Welcome.
The questioner : Peace be upon you and Allah's mercy.
The Shaykh : And upon you be peace, and the mercy of Allah and His blessings.
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.