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Cash And Kind Capital Contributions In A Partnership

Question

Amar wants to start a partnership with Zaid, he says that I will provide the machinery and you should provide the working capital. Is this permissible?

Answer

According to the Hanafi Madh’hab, in a partnership, the capital has to be in cash form from both partners. If one partner provides cash and the other partner provides kind such as machinery, then such a partnership will not be valid. 

To make this partnership Shari’ah compliant, the owner of the machinery should sell half of his machinery to the other partner for a nominal amount and thereafter they should enact a partnership contract.

Checked and Approved By:

Mufti Muhammed Saeed Motara Saheb D.B.

References

الشركة إذا كانت بالمال لا تجوز عنانا كانت أو مفاوضة إلا إذا كان راس مالهما من الأتمان التي ا تتعين في عقود المبادلات نحو الدراهم والدنانير فأما ما يتعين في عقود المبادلات نحو العروض والحيوان فلا تصح الشركة بهما سواء كان ذلك رأس مالهما أو رأس مال أحدهما كذا في المحيط
(الهندية ٣٠٦/٢) 

(وإذا أرادا) أي الشريكان (الشركة بالعروض باع كل واحد منهما) قال في الجوهرة: صوابه أحدهما (نصف ماله بنصف مال الآخر) فيصيران شريكي ملك، حتى لا يجوز لأحدهما أن يتصرف في نصيب الآخر (ثم) إذا (عقدا الشركة) صارا شريكي عقد، حتى جاز لكل منهما أن يتصرف في نصيب صاحبه،
(اللباب ٠٧/٣ ٣) 

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