And in the case of a loss, how do they handle the shop?

The questioner : Okay, our dear Shaykh, in the case of a loss, what do they do with the shop? Does it return to its owner, and how is this partnership terminated in the case where it is not permissible according to the Shari'ah, given that a full year has passed for them?

The Shaykh : No, it is permissible, but the second question is: if the partnership incurs a loss, what do they do with the shop?

The questioner : What do they do?

The Shaykh : The one who is the partner in the capital loses his capital, and this one loses his profit, just like any other person. For example, you give your money to a poor man who trades with this money, and if he is not successful—and of course, he is supposed to be trustworthy and not swallow the egg and the shell, as they say—he is trustworthy, but he was not successful in this trade. The partner in the capital loses his principal, and the partner in his labor loses the fruit of this money. Therefore, the shop remains for this man, unless they agreed upon a specific agreement that the value of the shop is such-and-such and the value of the capital invested is such-and-such, sharing equally, or with a markup, which is what it is. So, in the end, after this type of agreement, if there is a loss, each loses according to the amount of money they invested in.