Q. I have a
considerable amount of money saved by me from my monthly income. I want
to invest it in a lawful business which can give me some profit. One of
my friends has offered me to enter into partnership with him, I shall
give him the money and he will invest it in his business which is already
established and run by him. He has agreed to pay me a sum of two thousancs
rupees monthly as my share in the profit. Is it permissible for me to
enter into partnership on these terms?
A. No. A pre-determined amount of money cannot be fixed as a profit
in a partnership. If you want to enter into partnership with your friend,
you will have to share his risks also. In case he faces a loss, you will
have to bear it in proportion to your investment. And if the joint venture
brings a profit, the same may be shared on the agreed ratio.
Thus the amount of profit can only be known after the profit accrues actually,
and it cannot be fixed beforehand. However a provisional profit may be
distributed before the actual accounting takes place. On this basis, the
monthly payment of a particular amount may be agreed but it must always
be subject to the final settlement at the end of the term. When this final
settlement will take place on the basis of the actual gain or loss, all
the provisional payments made earlier must be taken into account and must
be adjusted according to the actual profit or loss. Without this necessary
condition the said agree- ment of partnership will not be valid agreement
according to Shariah.
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