Are there any legitimate impediments to a business model that relies on investing students' capital, paying them fixed monthly profits, and allowing them to withdraw the principal at any time?
If the intention behind fixing a specific amount for expected profits is to guarantee a known profit for the investor, then it is not permissible. However, if the intention is to determine a percentage of the profit, with the investor receiving a monthly sum on account, and then a final settlement is made when the profit becomes apparent, this is permissible. The fact that you can estimate the profit does not permit guaranteeing a known profit or guaranteeing the capital. Rather, a percentage of the profit (such as one-third or one-half) is agreed upon in the contract, and the owner of the capital bears the loss, if any, provided there is no negligence on the part of the worker.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Ftawy
- Original fatwa ID
- 178536
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy