Q1084: Is it permissible for us to give our property to a businessman to do some business with it on condition that the businessman pays us a specified share of the profit, just as it is common in the banking system that people are paid a specified share of profit on their bank deposits? If not, then how is it possible for us to invest our money in such a framework?

A: It must be in the framework of a Mudharabah to which special conditions apply as follows:

1- The period of the contract must be specified;

2- The proportion of the share of profit for each party must be specified;

3- The agent who receives the property should put it to a business.

It is recommended that they lay down a condition as an integral part of the contract that if the agent comes to any harm concerning their business and partnership, they should compensate it with their own money and pay a specified amount of money as partial payments to the owner of the invested money monthly until its time for their settlement.

Q1085: Regarding the fact that the profits earned on a Mudharabah contract must be shared in terms of specified percentages or proportions, and that in some businesses it is not possible to figure out the exact amount of the profits, is it permissible to specify the shares of profit based on a certain minimum profit which is expected to be made? For instance, if the business is expected to make a minimum of 5 units of profit, then they can share it in such a manner that one receives 3 and the other receives 2 units of the profit.

A: Such a contract is valid; however, it must be mentioned in the contract that the remaining 2 units belong to the other party, and as it is difficult to settle their accounts annually, it will be best for them to reach a compromise at the time of concluding the contract, concerning the shares of profit, that is, the one who is likely to receive a bigger share, should come to an agreement with the other party so that they reach a compromise. Such a contract is permissible.

Q1086: A person has given their savings to a businessman or producer so that the latter invests it in the business and pays a monthly share of profit to the investor; the amount of the profit gained is figured out by the investor through the bills and documents. Is earning such a monthly profit permissible?

A: If it is in the framework of Mudharabah or a partnership, it is permissible.

Q1087: If two people conclude a Mudharabah contract and after some time it is revealed that the agent has paid a specified share of profit to the investor without having invested the money in business, and has gone bankrupt due to the payment of such profits, then what will the verdict be on the profits received by the investor? Should they be returned to the agent?

A: Since the profits that the agent has paid to the investor have been along with the agent’s consent, this is considered as one’s making others dominant over one’s property in return for no charge, and therefore is not liable to be recompensed; hence, it is not obligatory to return the profits.

Q1088: If a person goes bankrupt due to the payment they have made to the investors in a Mudharabah contract without having invested their money in a business, and the investors have received as much money as the amounts they invested or even more than their investments, then what will the verdict be on the investments?

A: The agent still owes the investments to the investor, since the payments they have made to the investors have been along with their consent and are deemed as one’s making others dominant over one’s property free of charge.