Back to search

Is it obligatory to return the full amount to someone who participated in a project with the condition of guaranteeing the capital upon loss, when the project has indeed incurred a loss?

1 min readAlso available in العربية

Losses in companies are proportional to the capital invested, and it is impermissible to stipulate a guarantee of capital. Jurists have agreed that losses in companies are borne by all partners, according to each one's capital contribution, and it is not permissible to stipulate otherwise. As for stipulating a guarantee of capital, scholars have differed on whether it invalidates the partnership or not. The more authoritative view is that the condition is void, but the contract remains valid. Thus, the loss is borne by each partner in proportion to their capital in the company, and no one guarantees the capital of their partner.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

Read the full answer on Ftawy