Is it Islamically permissible for the profit share to be 8% and the loss share 5% in a company's partnership?
Source: FtawySummarized from the full answer at Ftawy · reviewed Sep 2, 2026
It is not permissible to invest in a way that guarantees the partner or the mudarib (investor/entrepreneur) the capital, because this condition is void and contrary to the principles of Islamic investment. These principles stipulate that the mudarib does not bear the loss of capital except in cases of transgression or negligence. This condition makes the contract an interest-bearing loan, not a legitimate investment contract. The jurists have agreed on the invalidity of this condition, even if they differed on the invalidity of the contract itself.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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