How can the money and effort expended in a project that lasted for one year, and whose personal expenses were mixed with it, be estimated to determine the percentages of profit and loss? Is it permissible to agree with financiers on a rate of 7.5% of the company's shares for every 5 Saudi Riyals, and how can profits and losses be divided? If this agreement is not permissible, is it permissible to agree with them on a gift of 50-70% in exchange for the previous effort and money?
The permissible form for selling a share in a company is to sell a known percentage for a known amount, provided that the partners bear losses in proportion to the share they purchased, and profits are distributed according to the agreement. In this case, the seller's ignorance of what he spent on the project does not matter. The Islamic Fiqh Academy has stipulated the permissibility of companies if they are free from unlawful elements, gharar (excessive uncertainty), and jahalah (ignorance) that lead to dispute, and the necessity for each partner to bear their share of the loss in proportion to their contribution to the capital.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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