If a restaurant transforms from loss to profit, should the old losses first be covered from the profits, and then the remaining profits be distributed, or should the capital-contributing partners bear the past losses, and the new profits be distributed immediately? Is it permissible for the working partner to request a wage for his work, and how should past losses be calculated in this case?
It is permissible for two individuals to share capital from both of them, with one of them providing the labor. This is known as "Sharikat al-Inan" (equal partnership) or "Mudarabah" (commenda partnership). The company's profits are not distributed until the capital is fully recovered. If the company incurs a loss and then makes a profit, the profit compensates for the previous loss. Losses are distributed according to the proportion of each partner's capital, by consensus. The rights of individuals are subject to forgiveness and waiver; therefore, it is permissible for partners to agree to clear old losses and charge them to each partner according to the proportion of their capital, and then distribute the profits, provided the owners of the capital agree to this. It is not permissible, by the consensus of scholars, for a partner to receive a fixed wage; rather, their right is a percentage of the company's profits.
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- Original fatwa ID
- 191038
- Imported
- Translation status
- Source text, unreviewed
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