{"id":2621,"date":"2020-09-04T09:48:41","date_gmt":"2020-09-04T07:48:41","guid":{"rendered":"http:\/\/themufti.com\/?p=2621"},"modified":"2020-09-04T09:48:42","modified_gmt":"2020-09-04T07:48:42","slug":"can-profit-be-fixed-in-an-investment","status":"publish","type":"post","link":"https:\/\/themufti.com\/?p=2621","title":{"rendered":"Can profit be fixed in an investment?"},"content":{"rendered":"<h4><strong>Can profit be fixed in an investment?<\/strong><\/h4>\n<hr \/>\n<p><strong>Q. I invested R100 000 of stock in my friend\u2019s business. My friend agreed to give me a fixed return on investment of R50 000 on R100 000 after selling the stock. At the end of it, I would receive R150 000 in total. Is this correct according to Shariah? <\/strong><\/p>\n<p><strong>A.<\/strong> The transaction in reference is non-Shariah-Compliant. The Shariah-Compliant alternative is to enter into a Mudaarabah partnership.<\/p>\n<p>In brief, a Mudaarabah partnership entails one person giving to another person capital to do business and both of them share the profit based on a <strong>percentage of profit share.<\/strong> For example, Hamzah gives R100,000 to Zaid as capital to do business and they agree on a 50% profit share.<\/p>\n<p>Hamzah and Zaid cannot agree on a <strong>fixed profit share,<\/strong> for e.g. R50,000 profit as this will be tantamount to <strong>interest.<\/strong> The business could make R40,000 but Zaid will have to pay Hamzah R50,000 or the business could make R60,000 but Zaid will only have to pay Hamzah R50,000.<\/p>\n<p>Therefore, in the enquired situation, it is not permissible to agree on a fixed amount of profit share i.e. R50,000 on your investment of stock in your friend\u2019s business. A percent of profit share for e.g.50% must be agreed upon for the investment to be Shariah-Compliant.<\/p>\n<p><strong>Allah Ta\u2019ala Knows Best<\/strong><\/p>\n<p><strong>Mufti Ismaeel Bassa<\/strong><\/p>\n<p><strong>themufti.com<\/strong><\/p>\n<p><em>\u00a0<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Can profit be fixed in an investment? Q. I invested R100 000 of stock in my friend\u2019s business. My friend agreed to give me a fixed<span class=\"excerpt-hellip\"> [\u2026]<\/span><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[61],"tags":[],"class_list":["post-2621","post","type-post","status-publish","format-standard","hentry","category-trade"],"_links":{"self":[{"href":"https:\/\/themufti.com\/index.php?rest_route=\/wp\/v2\/posts\/2621","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/themufti.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/themufti.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/themufti.com\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/themufti.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2621"}],"version-history":[{"count":1,"href":"https:\/\/themufti.com\/index.php?rest_route=\/wp\/v2\/posts\/2621\/revisions"}],"predecessor-version":[{"id":2622,"href":"https:\/\/themufti.com\/index.php?rest_route=\/wp\/v2\/posts\/2621\/revisions\/2622"}],"wp:attachment":[{"href":"https:\/\/themufti.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2621"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/themufti.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2621"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/themufti.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2621"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}