I’m doing a business investment with a broker whereby I am investing the money on a capital guaranteed basis for 12 months. In profit we are 50/50 in loss the capital is guaranteed. Kindly advice if this is this Shariah compliant.
Answer:
In the name of Allāh, Most Gracious, Most Merciful
Assalāmu ῾alaykum wa Rahmatullāhi Wabarakātuh
The underlined principle with regards to profit and loss in partnership and business investments is:
الربحعلىماشرطاوالوضيعةعلىقدرالمالين
The profit is based on the agreement of the parties, but the loss will always be proportionate to the capital investment.
Hence, the condition that the capital is guaranteed at the time of loss is impermissible. If you have given 50% of the capital, you will be liable of 50% of the debt if the investment suffers a loss.
Hereunder is the link to a detailed article written by one of the students of the Darul Ifta.
http://www.al-inaam.com/fataawa/shares_stocks/shares_stocks.htm
And Allāh Ta῾āla Knows Best
Wassalāmu ῾alaykum
Ml. Rayhaan Docrat,
Student Dārul Iftā
Checked and Approved by:
Mufti Ebrahim Desai
Dārul Iftā, Madrasah In῾āmiyyah