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Limited Partnerships

Answered by: Shaykh Shafiur Rahman


Asalamualaikum I have questions regarding the issue of business & investment.

Person A made the investment with Person B to purchase a plot of land in Pakistan. Person A was the one who asked Person B if will you make an investment with me on a 50/50 share of the plot of land so Both parties put an equal amount & will make profits from this & share equally.

Person A told Person B to transfer money to the account of the Agent who he recommended & knows personally & has dealt with him before with similar investments.

Both parties believe that Plot has been purchased by the agent once they transferred money to him.

But Person A has not given any proof of purchase or receipt for the transaction to Person B after repeated requests.
Person B doesn’t Know the Agent to ask him so was relied upon Person A to provide the information.

After a few years passed Person B has still not received any proof.

Now Person A is saying that his agent has caused the issue & potentially might not have bought the plot of land & is working to get the money back from him.

Now the question is what responsibilities does Person A has towards Person B.

If the money has been lost, is it the responsibility of Person A to compensate Person B or not Islamically?

Person A is saying he has no responsibility because he did not take the money it was transferred directly into the agent account which was given by him.

Is Person A right that it is not his responsibility if the money is lost or not recovered although he’s the one who recommended the agent after previously using him & personally knows him?

Appreciate it if you can give the Islamic ruling regarding this Jazak’Allah Khair.

In the name of Allah, the Most Gracious, the Most Merciful


This appears to be a limited partnership investment between person A and person B to invest equal amounts into a plot of land and then share any profits equally.

A partner is not permitted to engage in a transaction or activity that would be harmful to the partnership’s capital or business.[1] If it was proven that A was negligent by not checking if the actual purchase of the land was made by the agent as promised or negligent for not demanding proof of purchase and confirmation papers from the agent then it could be argued that person A is responsible for the loss as it was his recommendation and his negligence of not ensuring the land was actually purchased.  

Only Allah knows best

Written by Shaykh Shafiur Rahman

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

[1]وَكُلٌّ) مِنْ شُرَكَاءِ الْمِلْكِ (أَجْنَبِيٌّ) فِي الِامْتِنَاعِ عَنْ تَصَرُّفٍ مُضِرٍّ (فِي مَالِ صَاحِبِهِ) لِعَدَمِ تَضَمُّنِهَا الْوَكَالَةَ

ص300 – كتاب الدر المختار وحاشية ابن عابدين رد المحتار – كتاب الشركة – المكتبة الشاملة الحديثة

This answer was collected from DarulIftaBirmingham.co.uk, which is run under the supervision of Mufti Mohammed Tosir Miah from the United Kingdom.

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