Distribution of profits in a partnership

· 12 Rabiʻ II 1443 AH1 min readEnglish

Question

Question 1:

My brother in law and I would like to venture in a business of exporting rice from India to South Africa. He will invest 15% and I will invest 85% of cash in this venture. He will also be fully in charge for procuring the rice from the mills and for the admin work in India. I will be responsible for the work in South Africa, dealing with the customers and any other work that's needed.

I would like to find out how should our profit be distributed? Based on the percentage invested or 50/50?

Question 2:

I have invested in my brother in laws aluminium business where he uses my cash and buys for COD and his supplier gives him a cash discount of 1 rupees per kg. This cash discount he gives it to me as my dividends of my investment.

1. Is this dividends permissible for me (cash discount received by him/his business)?

2. Should it not be that the cash discount be for the business and the profit that he makes by selling the aluminium (of my cash that he used to buy) be split according to a fixed percentage mutually agreed?

Answer

1. Both ways are correct. Whatever both mutually agree upon.

2. It is supposed to be shared.

And Allah Ta'ala (الله تعالى) knows best.

Answered by
Mufti Ebrahim Salejee (Isipingo Beach)
Questions about this ruling, answered only from the archive with sources.

Where scholars differ, it’s safer to take the more cautious view.

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