What is the ruling on investing in a company that sells flour and distributes profit with investors on the basis of a monthly percentage with an agreed-upon minimum, with the possibility of the investor receiving a percentage of the original amount only if the company closes before the end of the agreed-upon period?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
It is impermissible to invest money in a company that guarantees profit and principal, or that stipulates the partner receives a portion of the principal upon termination before the term expires. This is because such conditions invalidate the Mudarabah contract and unjustly consume the partner's wealth. The profit must be a common percentage of the actual profit, and the loss is borne by the principal unless there is misconduct or negligence. It is permissible to set a time limit for the Mudarabah and to disburse some profits on account.
Summarized from the full answer at Ftawy · imported
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- 158636
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