What is the ruling on participating in a collection of funds to purchase food for school canteens and sell it, with each participant receiving a profit greater than their initial capital contribution once annually?
It is permissible for more than one person to participate in trade with both capital and labor, or with capital only, provided that each partner has a known percentage of the profit agreed upon by all. It is not a condition for the capital or labor to be equal.
Among the conditions that invalidate a partnership are: guaranteeing the capital, or making the profit a percentage of the capital. Rather, the profit must be a percentage of the total profits. It is permissible to distribute profits only at the end of the year while retaining the capital for investment in the following year.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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