❀ Shar'i Ruling on Investment Based Solely on Profit Sharing ❀
Fatwa by: Fadhilat al-Bahith Wajid Iqbal ḥafiẓahullah
Is it permissible to invest in a business where the agreement is to share only in the profit, without any liability for loss?
If a person invests in a business on the condition of sharing only the profit, and without bearing any risk of loss, then such a contract falls under the category of interest (Ribā) and is ḥarām (prohibited) in Islam.
Such an arrangement contradicts the principles of Sharʿī partnership (Muḍārabah or Mushārakah), where both profit and loss must be proportionally shared. Guaranteeing profit without sharing potential loss equates to an interest-based return, which is explicitly forbidden.
وَاللهُ أَعْلَمُ
And Allah knows best.
Fatwa by: Fadhilat al-Bahith Wajid Iqbal ḥafiẓahullah
❖ Question:
Is it permissible to invest in a business where the agreement is to share only in the profit, without any liability for loss?
❖ Answer:
If a person invests in a business on the condition of sharing only the profit, and without bearing any risk of loss, then such a contract falls under the category of interest (Ribā) and is ḥarām (prohibited) in Islam.
Such an arrangement contradicts the principles of Sharʿī partnership (Muḍārabah or Mushārakah), where both profit and loss must be proportionally shared. Guaranteeing profit without sharing potential loss equates to an interest-based return, which is explicitly forbidden.
وَاللهُ أَعْلَمُ
And Allah knows best.
