Darul Iftaa Mahmudiyyah

Business partner incurring loss

· 18 Safar 1439 AH1 min readFatwa 39336English

Question

Respected mufti saheb

My question goes as follows

2 people decided to start a business with agreement to profit and loss. The one partner made a decision which involved the capital being lost and also a debt occuring. No one knew the existence of the other partner and now the creditor is demanding from the one partner. Does the other partner take part in the responsibility of the loss even though the fault was made by the other partner? The other partner did give decision rights to the one partner

Answer

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

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

If two partners enter into a business and the business suffers a loss through the normal business decision made by the active partner, then both partners will share in the loss according to the proportion of their investments.[1]

And Allah Ta’āla Knows Best

Saad Haque

Student Darul Iftaa
New Jersey, USA

Checked and Approved by,
Mufti Ebrahim Desai

References (Arabic / Urdu sources)

[1] بدائع الصنائع في ترتيب الشرائع (6/ 62)

وَالْوَضِيعَةُ عَلَى قَدْرِ الْمَالَيْنِ مُتَسَاوِيًا وَمُتَفَاضِلًا؛ لِأَنَّ الْوَضِيعَةَ اسْمٌ لِجُزْءٍ هَالِكٍ مِنْ الْمَالِ فَيَتَقَدَّرُ بِقَدْرِ الْمَالِ،

الاختيار لتعليل المختار (3/ 16)

(وَإِذَا تَسَاوَيَا فِي الْمَالِ وَشَرَطَا التَّفَاوُتَ فِي الرِّبْحِ وَالْوَضِيعَةِ، فَالرِّبْحُ عَلَى مَا شَرَطَا وَالْوَضِيعَةُ عَلَى قَدْرِ الْمَالَيْنِ) قَالَ - صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ -: «الرِّبْحُ عَلَى مَا شَرَطَا وَالْوَضِيعَةُ عَلَى قَدْرِ الْمَالَيْنِ» مِنْ غَيْرِ فَصْلٍ، وَلِأَنَّا جَوَّزْنَا اشْتِرَاطَ زِيَادَةِ الرِّبْحِ بِمُقَابَلَةِ الْعَمَلِ تَقْدِيرًا. أَمَّا زِيَادَةُ الْوَضِيعَةِ فَلَا وَجْهَ لَهَا، وَصَارَ كَمَا إِذَا شَرَطَا الْوَضِيعَةَ عَلَى الضَّارِبِ فَإِنَّهُ لَا يَصِحُّ كَذَلِكَ هُنَا.

An Introduction to Islamic Finance p. 37

Answered by
Saad Haque
Checked & approved by
Mufti Ebrahim Desai
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Source: Darul Iftaa Mahmudiyyah — https://askimam.org/public/question_detail/39336
Fatawa SA: https://fatawa.co.za/fatwa/askimam-39336

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