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Mutharaba/Musharakah

Answered as per Hanafi Fiqh by Askimam.org

AS SALAAM WALIKUM

I LIVE IN CANADA, I AM AN IMPORTER,

I IMPORTED ONE SHIPMENT OF FOOD PRODUCTS FROM PAKISTAN AROUND CAN $22000.

I INVESTED CAN $12000 AND REST MY BROTHER INVESTED IN MY SHIPMENT CAN $10000.

BUT HE WAS LIKE SLEEPING PARTNER, I DID ALL THE WORK I WENT TO STORES TO SELL MY PRODUCTS I COLLECTED ALL THE MONEY I DID ALL LABOUR WORK MARKETING EVERYTHING I USED MY CAR TO DELIVER THE PRODUCTS.

MY QUESTION IS THAT MY NET PROFIT IS AROUNT CAN $4000 WHAT WILL BE THE SHARING RATIO BETWEEN ME AND MY BROTHER.

HOW MUCH SHOULD I GIVE TO MY BROTHER.

THANKS

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

It is important to educate oneself with the relevant Islamic laws of any business juncture from the very inception.

The deal between you and your brother is known as shirkah. It is necessary to determine the percentage of profits that each partner will be entitled to from the very onset. Failure to do so makes the partnership null and void. (faasid).

You did not determine your profits from the inception of your partnership, therefore your partnership has become faasid. The ruling for a partnership that becomes faasid is that the profits will have to be shared proportionate to capital contribution.[i]

In the enquired situation, the sleeping partners’ capital is 45.45%. Thus his share will be 45.45% of the profit. 

Hereunder are a few guidelines you may refer to for the future.

1)    The profits derived from a business venture are in lieu of the capital or the risk or the labour.[ii]

2)    In cases where there is a sleeping partner, the sleeping partner can only have a share ratio of the profits proportionate to his capital investment or less.[iii]

3)    In future, you should specify and determine everything before entailing into a partnership. The best thing would be to sign a memorandum of agreement which stipulates every aspect of how the business shall be conducted.

4)    You say you did all the work and labour, it would be advisable to increase your profit percentage slightly which will be in lieu of your effort. This should be done so that you do not feel your effort have gone uncompensated.

And Allah Ta’āla Knows Best

Imran Patel

Student Darul Iftaa

Zambia

Checked and Approved by,
Mufti Ebrahim Desai.


[i]

مختصر القدوري (ص: 112)

وكل شركة فاسدة فالربح فيها على قدر المال ويبطل شرط التفاضل

بدائع الصنائع في ترتيب الشرائع (6/ 59)

ومنها) : أن يكون الربح معلوم القدر، فإن كان مجهولا تفسد الشركة؛ لأن الربح هو المعقود عليه، وجهالته توجب فساد العقد كما في البيع والإجارة.

[ii]

بدائع الصنائع في ترتيب الشرائع (6/ 81)

 لأن الربح لا يستحق في المضاربة من غير عمل ولا مال

بدائع الصنائع في ترتيب الشرائع (6/ 65)

 الربح كما يستحق بالملك والضمان يستحق بالعمل فجاز أن يستحق زيادة الربح بزيادة العمل كالمضارب والشريك شركة العنان

بدائع الصنائع في ترتيب الشرائع (6/ 62)

والأصل أن الربح إنما يستحق عندنا إما بالمال وإما بالعمل وإما بالضمان، أما ثبوت الاستحقاق بالمال فظاهر؛ لأن الربح نماء رأس المال فيكون لمالكه، ولهذا استحق رب المال الربح في المضاربة وأما بالعمل، فإن المضارب يستحق الربح بعمله فكذا الشريك.

وأما بالضمان فإن المال إذا صار مضمونا على المضارب يستحق جميع الربح، ويكون ذلك بمقابلة الضمان خراجا بضمان

An Intoduction to Islamic Finance by Mufti Taqi Usmani

[iii]

بدائع الصنائع في ترتيب الشرائع (6/ 62)

 إذا شرطا الربح على قدر المالين متساويا أو متفاضلا، فلا شك أنه يجوز ويكون الربح بينهما على الشرط سواء شرطا العمل عليهما أو على أحدهما والوضيعة على قدر المالين متساويا ومتفاضلا؛ لأن الوضيعة اسم لجزء هالك من المال فيتقدر بقدر المال

This answer was collected from Askimam.org, which is operated under the supervision of Mufti Ebrahim Desai from South Africa.

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