Is the company Islamically responsible for the original value of the loan taken in the partner's name to finance it, or only for the amount the partner paid to the bank after settlement?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
If the loan involves usury (riba), one must repent to Allah. The company is responsible for repaying what was disbursed to the bank on its behalf, and no more. The borrower is considered an agent of the company in taking the loan. The company repays the full debt before the profits are divided. The partnership is not valid if one of the partners receives a fixed, predetermined amount; rather, he should receive a percentage of the profit after the company's debts are paid and profits are calculated.
Summarized from the full answer at Ftawy · imported
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- Ftawy
- Original fatwa ID
- 172291
- Imported
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