Is there any doubt concerning the acquisition of a specific percentage of shares in a venture capital firm in exchange for it providing financing and distributing annual profits?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
The transaction mentioned is a diminishing partnership, for which three conditions are required for its permissibility: that it is not merely financing through a loan, that the bank owns its share in full ownership, and that the contract does not include a condition that the partner must return the bank's full share of both capital and profits. This last condition is what the mentioned contract includes, which makes it impermissible because it resembles an interest-based loan. As long as the company stipulates this condition, it is not permissible to enter into that contract with them.
Summarized from the full answer at Ftawy · imported
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