Sleeping partner fixing his share of the profit more than his capital investment
Question
Ayyoob and Junaid each contributed R200 000 as their capital investment to start a business partnership. They both agreed that Ayyoob will work in the business and Junaid will be a sleeping partner. Is it permissible for Junaid to stipulate his share of the monthly profits as 60% (i.e. 10% more than his capital investment)?
Answer
It is not permissible for a sleeping partner to fix his share of the profit more than his capital investment. Since the capital investment of Junaid is 50%, his profit share cannot exceed 50%.
And Allah Ta'ala (الله تعالى) knows best.
References (Arabic / Urdu sources)
وإن شرطا العمل على أحدهما فإن شرطاه على الذي شرطا له فضل الربح جاز والربح بينهما على الشرط فيستحق ربح رأس ماله بماله والفضل بعمله وإن شرطاه على أقلهما ربحا لم يجز لأن الذي شرطا له الزيادة ليس له في الزيادة مال ولا عمل ولا ضمان وقد بينا أن الربح لا يستحق إلا بأحد هذه الأشياء الثلاثة (بدائع الصنائع 6/63)
- Answered by
- Mufti Zakaria Makada
- Checked & approved by
- Mufti Ebrahim Salejee (Isipingo Beach)
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