The Capital Contribution Percentage Being Different To The Profit-Share Percentage
Question
Two people invest in a business. One gives 60 percent of the capital and one gives 40 . They agree that they will be 50-50 owners of the business. Is this permissible? If they want to terminate the partnership, how much share should each partner get?
Answer
Such a partnership is permissible and all profits will be divided according to what was mutually agreed upon stipulated which in this case is 50% each. The partners however will not be 50/50 owners of the business, rather they will merely be entitled to that amount of the profit accrued.
If such a partnership is terminated the profit will be distributed as stipulated i.e: 50% each and each person will be entitled to the capital he invested i.e: 60% for the one who invested 60% and 40% for the one who invested 40%.
References (Arabic / Urdu sources)
Shaami V. 4 Pg. 312
Fataawa Mahmoodiyah V. 23 Pg. 404
- Approved by
- Mufti Muhammed Saeed Motara Saheb D.B.
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