What should I do to recover my money that I lent to my relative, which he has not returned despite our agreement on trade and profit?
It is not permissible for the capital of the company, or a part of it, to be a debt owed by the Mudarib (investing partner) or the partner, as this contradicts the purpose of a company, which is the immediate disposition of funds. Furthermore, the Mudarib does not guarantee the capital in a partnership unless there is negligence on his part. This partnership is invalid, and if it occurs, all profit belongs to you because you provided the capital, and your partner is only entitled to wages for his work. This is in accordance with the statement of Ibn Qudamah: "Whenever a partnership occurs in an invalid manner, they divide the profit according to their capital contributions, and each one of them compensates the other for the wages of his work."
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