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Fixing a Profit

Answered as per Hanafi Fiqh by CouncilofUlama.co.za

Q: I supply certain companies with items such as machinery and equipment. Because the amounts are high can I take on people to invest with me where I give them +-10% profit of the profit? For instance if someone puts R100,000 capital can I give him +- R8,000-R10,000 based on that deal, without a guarantee applying on profits. Is that permissible?

A: It is not permissible to fix a sum of money as ‘profit’ for an investor. The percentage profit-share should be stipulated, e.g. 10%, 20%, etc.  After paying all trade expenses, the percentage share should be given from the net profit.

Aadiel Moosagie (Mufti)
Council of Ulama Eastern Cape
+27 83 982 6968
[email protected]

This answer was collected from CouncilofUlama.co.za, which is operated under the supervision of Council of Ulama Eastern Cape, South Africa.

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