Question: Determining Share Percentage in an Islamic Partnership: In a traditional company or partnership, a partner's share percentage is often determined by the ratio of their initial investment to the total investments of all partners. Is this principle applicable...
Partnerships
Being partner to a business due to one’s labour
Question:- A wife started a business from home while her husband worked and supported the household. The wife's business prospered so they both agreed that the husband should leave work and join her in business. This business flourished thereafter. Unfortunately, some...
Inflating the price of a property as legal transfer was pending
Question:- What is the ruling on the following matter? We are three partners in a property. We own half the property and the other two partners own a 1/4 share each. Three years ago we had a meeting and offered to buy the other two partners out as per their request....
Borrowing partner’s portion of land for cultivating crops
Question:- Two people own a piece of land which is in joint partnership. One partner decides to cultivate the land and sell the produce (with the permission of the other partner). Does the other partner share in the profits (from the produce that will be sold)?...
Partners not willing to sell their share/s in a partnership
Question:- My siblings and I are partners in a business. I am the only the only active partner while the rest are all silent partners. They are not willing to sell their shares over to me. Can they be forced to sell their shares over to me since they are all silent...
Dental partnership agreement
Question:- Dentist 'A' goes into a 50% partnership with dentist 'B'. Dentist 'A' will run the practice and earn 30% of total turnover (before expenses). Thereafter, the nett profit will be shared equally between the 2 partners. Is the above arrangement permissible?...
Diminishing partnership
Question:- What is a diminishing partnership in terms of Shariah and how is it enacted? Answer:- The method of enacting a diminishing partnership is as follows: Zaid wants to purchase a house and only has 50% of the funds required to purchase it. He therefore requests...
Ceasing a partnership agreement due to absenteeism
Question:- If any of the partners in a partnership agreement stops working, whereas the partnership agreement clearly states that he is required to work, and remains absent for a period of 10 years, then will such a partner still be considered as part of the...