Dear Mufti Saheb, Assalamu alaikum, My cousin is having a business. I like to invest in his business. He agrees to share returns every year based on profit and loss of the company but does not want to include me as a partner officially in the company. Therefore although for all practical purposes I will be a deemed partner in the company there will be no official record for the same. As per the governmant rules only partners are entitiles to share in the profit and loss of the company. To overcome this legal hurdle my cousin offers to give me my share of profit in the name of “interest” although actually it is my share of profit and not acutally riba. If there is loss in the company I would not receive any returns and will share in the the loss. Please advise whether this arrangement is OK and not contrary to the principles of Shariah. Jazakallah khair
Answer:
(Fatwa: 423/379=D)
Your cousin takes the money from you and invests it in his business in partnership. So, if there is profit he will give it to you and if there is loss then you also will bear the loss as per the percentage of your amount, such a partnership is permissible unless there is no nullifying conditions, and the profit earned through it shall be lawful whether he shows you in government records as partner or not, the partnership however will be valid.
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband