What is the ruling on obtaining funding for a simple project whose profitability is not yet known, through investment contracts that include the following conditions: 1. Dividing the project costs equally among investors monthly. 2. Covering costs from profits first, then dividing the remaining amount equally among investors monthly. 3. If the number of investors exceeds three, the project owner is allocated 30% of the costs and profits, and the investors share the remaining 70% equally. 4. If the project ceases due to high costs and inability to pay them, it is converted into an investment company, and the current contract is considered terminated with a loss, and investors have no financial claims?
It is permissible to distribute project costs and profits equally among investors monthly, but it is not permissible to stipulate a share of ownership or profits for the project owner greater than their capital contribution. Profit is distributed according to the agreement, while loss is borne by the capital. It is not valid to terminate the contract and consider it a loss without it actually occurring, nor is it permissible for one investor to have financial advantages during liquidation or profit distribution. Investors must be informed of the company's status and their options during liquidation or loss. It also cautioned against bearing the trusts of people's money without being qualified.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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