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﴿ فَاسْأَلُوا أَهْلَ الذِّكْرِ إِن كُنتُمْ لَا تَعْلَمُونَ ﴾

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The Ruling on Mudarabah in Trade

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The fourth question: Is it possible for me to give a person money to trade with and work in it alone, and the profit is divided between us? We ask for clarification regarding what is lawful and forbidden for me, who did not participate in the work. Please inform us, may Allah reward you.
Answer: This partnership is called: mudarabah. The Companions of the Prophet (peace and blessings be upon him) practiced it, and it is permissible by the consensus of the Muslims, with no dispute. It is permissible for a person to give money to another to work in it and trade in it in various types of trade, and the profit is between them. Or the share is for the owner and three-quarters for the worker, or the reverse, as they agree. But it must be by a known shared portion. There is no harm in this, whether halves, thirds, quarters, or otherwise. The meaning is: by the known shared portion. But it is not permissible to say: Work in it on the condition that you get one hundred riyals every month, or fifty riyals every month, or one thousand riyals. No, it must be... your quarter, your third, your half, your sixth, and the rest is mine. Or he says: I, the owner of the money, take the sixth, the fifth, and the rest is for you, the worker. All of this is fine. Or the profit is between us, that is fine. Yes.
Source binbaz.org.sa

The Arabic text is copied verbatim from the original source, without any edits.

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