What is the Sharia ruling on how to dissolve a losing business partnership, given that one partner is the owner of the original business, clients, and equipment, while the other partner paid an amount to enter the partnership, part of which was from his own money and part from the company's profits, and he is now demanding that the amount he paid be calculated as a debt or expense among the losses?
Scholars have differed concerning the ruling on a partnership where the capital of one partner is cash and the other's is in kind (goods). The majority of them deem it invalid. However, the Malikis and Hanbalis consider it valid on condition that the goods are appraised and their value determined at the time of the contract, and this is the preponderant opinion. If the two partners agree on appraising the devices, then the partnership is valid, and profit and loss are divided according to each partner's share in the capital. It is permissible to stipulate an additional share for one partner in consideration of his work. However, if one of them stipulates profit without bearing loss, then the condition is void, because a partnership necessitates sharing in both. If they do not agree on appraising the devices and counting what the other partner paid as a share in the capital, then the partnership is invalid, and the partner is only entitled to what he initially paid.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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