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Placing a condition of capital return

Answered according to Hanafi Fiqh by Askimam.org
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assalamoalykum

I invested my money with my friend in a business, he told me that we will divide the profit amongst. He also promised that the amount you are investing will be given to me within 18 months and after that we’ll look towards the profit and loss.Is the condition of taking the invested money back within 18 months is permissible according to islamic view.

Answer

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

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

The agreement in reference is a Mudharabah agreement. 

Mudharabah is a business partnership wherein one partner contributes his capital to the partnership while the other partner manages the capital

In a Mudarabah partnership, a fixed profit ratio/percentage may be fixed. For example, partner A receives 60% of the profits while partner B receives 40% of the profits. However, a fixed amount cannot be fixed nor can a percentage be based on the capital investment. You may refer to the following link for a Shariah Compliant Mudharabah contract, http://daruliftaa.net/index.php/resources/publications/finish/27-publications/277-mudarabah-agreement-2

And Allah Ta’āla Knows Best

Huzaifah Deedat

Student Darul Iftaa
Lusaka, Zambia 

Checked and Approved by,
Mufti Ebrahim Desai.

______________

Introduction to Islamic Finance- Mufti Taqi D.B-Page 32

فقه البيوع-مفتي تقي صاحب -جلد 2-ص633-مكتبة معارف القرأن

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

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