Drawing expenses from the capital in a Mudhaarabah partnership
Question:-
Is it permissible for the investment agent to attach a condition that all expenses such as food, drink as well as household expenses will be drawn from the capital of the Mudhaarabah partnership?
Answer:-
If the investment agent (Mudhaarib) remains in his hometown and conducts business, then, to draw expenses for food, drinks and accommodation from the Mudhaarbah capital will not be permissible, and attaching such a condition causes the Mudhaarabah agreement to be invalidated. Yes, if he is transacting in another town, then the necessary expenses for eating, drinking and accommodation can be deducted from the capital. It is not correct to deduct any further expenses beyond that. When the investment accrues profit then the capital will first be returned, and thereafter the surplus profits be split between the Mudhaarabah agreement partners.
References:- Sharhul Majallah Li Muhammad Ataasi Pg.333 Vol.4 Maadaah 1411; Durr-e-Mukhtaar Pg.657 Vol.5; Fataawa Hindiyyah Pg.312 Vol.4