(Series of Answers by the Eminent Scholar Ata Bin Khalil Abu Al-Rashtah, Ameer of Hizb ut-Tahrir, to the Questions of Visitors to his Facebook Page "Fiqhi")
To Khalil Al-Abbasi
The Question:
Peace be upon you, our eminent Sheikh. I have a question regarding a company I entered into with a man who owns factories and supermarkets. I invested a sum of money with him for him to invest it for me, but he has other partners whom I have not seen and who have not sat with me. The owner of the company merely informed them that I had invested a sum of money with him. These individuals are capital-only partners like myself, while the company owner is a partner with both capital and effort (badn), and he is the one managing this company.
The question is: Is my partnership halal? I hope you can clarify this matter and what I must do, as some young men told me this partnership is halal, while others told me it is not permissible according to Sharia. May Allah bless you.
The Answer:
Walaikum Assalam Wa Rahmatullahi Wa Barakatuh,
Regarding the Mudharabah company, it is permissible as a Mudharabah between the capital of one partner and the effort of the other. It is also permissible between the capital of one partner and both the capital and effort of the other partner. Similarly, it is permissible between the capital of more than one partner and the effort of the Mudharib (manager). It is stated in The Economic System: "Among the forms of Mudharabah is the partnership between two amounts of capital and the effort of one of the owners. For instance, if two men had three thousand—one having one thousand and the other two thousand—and the owner of the two thousand allowed the owner of the one thousand to trade with the total on the condition that the profit is shared equally between them, the company is valid. The worker, who is the owner of the one thousand, would be a Mudharib for the owner of the two thousand and a partner to him. Likewise, Mudharabah includes the partnership of two amounts of capital and the effort of a third party; all of these fall under the chapter of Mudharabah."
Among the conditions for its validity, as stated in The Economic System: "The Mudharabah is not valid until the capital is handed over to the worker and he is given full access to it, because Mudharabah necessitates the delivery of capital to the Mudharib. In Mudharabah, the worker's share of the profit must be determined, and the capital upon which the Mudharabah is conducted must be a known amount."
As you can see, the conditions for the validity of Mudharabah include that the capital upon which the Mudharabah is based must be a known amount, and the share of the profit for the partner providing the effort must be clearly determined by the agreement of the partners. Accordingly, it is not permissible for the Mudharib to take money from this person and that person and agree with each of them on the profit without either of them knowing the total capital or whether the other partners agree to the profit percentage or not. Therefore, what was mentioned in the question is not permissible; rather, the partners must meet and agree on the profit and agree on the capital in a clear and known manner.
This is what I prefer in this matter, and Allah is All-Knowing and Most Wise.
Your brother, Ata Bin Khalil Abu Al-Rashtah
06 Ramadan 1439 AH 22/05/2018 CE
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