Darul Ifta Ibn Masood

Demise Of Business Partner

· 13 Rabiʻ I 1448 AH1 min readEnglish

Question

Below is a Business Share agreement:

Initially, Partner A controlled 60%, and Partner B controlled 40%. Over time, changes were made between both parties. Partner B passed away in May 2026. How should we resolve this business venture?

Answer

Fuqaha (Jurists) have stated that when a partner passes away, then the partnership ceases automatically. Hence, after the demise of Partner B, his portion of the partnership has terminated which will now fall part of the estate. The business must pay out his portion of the investment and the business will then resume as normal in regards to the other partners. If the heirs of deceased partner wish to be a part of the business, then a new partnership will have to be enacted.

References (Arabic / Urdu sources)

(وتبطل الشركة) أي شركة العقد (بموت أحدهما) علم الآخر أو لا لأنه عزل حكمي (الدر المختار 4/327)

(وتبطل الشركة بموت أحدهما ولو حكما) أي ولو كان الموت حكما بأن ارتد أحدهما ولحق بدار الحرب وحكم بلحاقه لأن الشركة من العقود الجائزة فيكون لدوامها حكم ابتدائها وهذا لأنها تتضمن الوكالة

قوله: وإذا مات أحد الشريكين، أو ارتد ولحق بدار الحرب بطلت الشركة) لأنها تتضمن الوكالة. مجمع الأنهر في شرح ملتقى الأبحر (1/ 728(

(Re: Fatawaa Uthmaaniya Vol. 7 Pg.15)

Answered by
Mufti Abdul Kader Fazlani
Checked & approved by
Mufti Yacoob Vally Saheb
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Source: Darul Ifta Ibn Masood — https://fataawa.co.za/demise-of-business-partner/
Fatawa SA: https://fatawa.co.za/fatwa/ibnmasood-46446

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