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What is the Shar'i ruling on a Mudarabah partnership in which a dairy cow farm is established with funds provided by one party, on condition that operational expenses, workers' fees, transportation costs, and land rental are included within the project cost, with the second party managing and establishing the farm, and how are the profit shares calculated between them?

1 min readAlso available in العربية

If he gives you money to invest in a project (like a cattle farm), this is a permissible Mudarabah (profit-sharing) partnership. In such a partnership, it is obligatory to agree beforehand on a known percentage of the profit for you; otherwise, the contract is invalid. If the meaning of "project expenses from its returns" is that profit is not calculated until the capital is covered, then this condition is valid. However, if it means that the worker bears the expenses even if there are no returns, then this condition is impermissible because it entails guaranteeing the capital and is unjust to the worker.

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

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