A person asked about the validity of an investment partnership agreement where one party guarantees a fixed profit and the other party bears no losses. The question includes details about the terms of the contract and the expected returns.
[AR_ID:2399]
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1 Answer
Peace be upon you and God's mercy and blessings.
Grand Ayatollah Sayyid Sistani (may God protect him):
If the owner stipulates in the partnership contract that the losses are entirely on him, the condition is valid, but the entire profit will also belong to the worker without the owner's participation. However, the owner can stipulate that the worker bears some or all of the losses, and this condition is valid and must be fulfilled.
Moreover, this contract is invalid because it conditions the validity of the partnership on a fixed percentage of profit, such as a specific amount or a third. In this case, the entire profit belongs to the owner, and the worker receives a fee equivalent to his work.
Source: Official website: 1, 2.
Grand Ayatollah Sayyid Khamenei (may God protect him):
If the worker trades with the partnership capital and incurs a loss, the worker is not liable; rather, the loss falls on the owner of the capital, and the loss can be compensated by the profit as long as the partnership remains. However, the owner may stipulate that in the event of a loss, the worker shares part or all of the loss from his own funds, and this is valid with the worker's consent.
It is also required in a partnership that the profit share for both the owner and the worker be specified as a fraction, such as a third, quarter, or half. The partnership is not valid if a specific monthly amount is designated for the owner (like one hundred thousand) as profit for the capital. However, the owner may take a specific amount monthly from the profit percentage that belongs to him.
Source: Fiqh Al-Wali: Rules of Partnership
May you be successful in all good.