Paying a percentage of the profit to a manager in a Mudhaarabah agreement
Question:-
Zaid gave Amr R100 000.00 as Mudhaarabah. When enacting the partnership he stipulated that the profit will be distributed as follows: 30% of the profits will be allocated to the Rabb-ul-Maal (investor), 60% will be allocated to the Mudhaarib (the investment agent), and the investor’s son who will also be working as a manager, 10% of the profits will be allocated to him. Will this method of distributing the profits be correct or not?
Answer:-
The distribution of the profits as described in the above scenario will be correct. It will also be correct for the investor to appoint his son as the manager of the partnership for whom 10% of the profits will be allocated, as the investor’s son is considered as a stranger in the Mudharabah agreement, and a stipulated portion of the profits can be fixed in lieu of a strange person’s services.
References:- Fataawa Darul Uloom Zakariyya Pg.763 Vol.5.