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Partnership Transaction

Question

Brother A and brother B went into a mudhaarabah transaction. They opened and ice cream shop. A funded the business and B ran the business. They shared the profits based on percentages agreed by both parties.

At some point B wanted a small cart to sell ice cream at events. C was hired to build a cart and he quoted B to build the cart at R15 500.

A paid C for the cart. After paying for the cart A told B that I give u the cart and it belongs to you. A made niyyah of sadqah at the time.

Nevertheless the cart never got built by C for various reasons. Thereafter due to lockdown and other factors A and B had to close the ice cream shop. Now they both decided to get the ice cream cart built by C and rent a small space in a mall.

B instructed C to build the cart. Kindly remember the cart belongs to B. However in order for the cart to function they need and ice cream machine. The value of this machine is R70 000. The ice cream machine belongs to A.

Also in this business venture A will be supplying the machine, initial stock as well as deposit for the mall and all other related costs to start this business.

In the given circumstance what kind of an Islamic transaction can be drawn up between brother A and B? And also how can they share in the profits from an Islamic perspective. The business is due to open by the end of this month. 

We require an answer before that so that an islamic agreement can be signed by both parties before they start operating the business.

Please advice accordingly. 

Answer

An Islamic transaction that can be drawn up in the enquired case is a Shirkat (partnership) transaction wherein both A and B contribute an equal capital sum towards the joint business. For instance, both contribute R20000 each towards the business. This combined R40000 may then be used to purchase the ice-cream machine, ice-cream cart and stock required to start the business.

If the ice-cream machine has already been procured by A, the machine will not form part of the business stock. He may however willingly allow its usage in the business.

Similarly, if the ice-cream cart has already been procured by B, he too can allow its use in the business; in which case
the joint capital of R100000 will not be needed to buy the ice-cream machine and ice-cream cart. The capital can then be utilized entirely to purchase stock for the business and for other overheads such as rental of the business space/premises, etc.
In a partnership of this nature, both the partners are at liberty to work in the business, in which case they will share the profits equally on a 50/50 basis. Alternately, it can also be decided that one will be the working partner while the other will be a sleeping partner. In the latter case (where one is the working partner), his profit-ratio can be increased; for example he could be allocated 60% of the profits while the sleeping partner would get 40% (even though their capital contributions were equal). However, in the event that there is a loss, both will have to bear the loss in proportion to their investment. So if their capital investment was equal (as in the cited example), they will be liable for the loss on a 50/50 basis, even though their profit-sharing ratio is on a 60/40 basis. The profit-sharing must be on a percentage basis. In other words, the profits will be shared as per an
agreed percentage ratio. It will not be permissible for one party to stipulate a fixed amount as his profit (for example to say that one partner will get R30000 of the profits).

Furthermore, as explained above, if perchance there is a loss in the business then both partners will have to bear (percentage-wise) the brunt of the loss based on the capital amounts invested by each partner. So if they both contributed equal capital amounts, they will be liable for the loss on a 50/50 basis.

If B does not have any cash to inject into the partnership as his investment contribution and only A has the finance, then the two of them could draw up a Mudharabah contract wherein A is the financer who will contribute a capital amount to purchase stock (ice-cream cones, milk, flavourings and other ingredients) and B will be the labourer. The two of them can then mutually agree to share the profits at an agreed ratio (for example, 50/50% or 60/40%). If A already owns the ice-cream machine, he can willingly allow B to use it for the ice-cream production. Similarly, if B already owns the ice-cream cart, he can also willingly allow its use for the operation of the business. The ice-cream machine and ice-cream cart will thus not be part of the business stock as these two itemsare not meant for resale, they are merely there to facilitate the smooth running of the business. If they decide to enact this Mudharabah option, then any losses incurred will fall entirely on the shoulders of A. The labourer B cannot be held responsible for any losses incurred during the business operation.

References

تقديم الأذان على الوقت في غير الصبح لا يجوز اتفاقا وكذا في الصبح عند أبي حنيفة ومحمد رحمهما الله تعالى وإن قدم يعاد في الوقت. هكذا في شرح مجمع البحر الرائق لابن الملك وعليه الفتوى. هكذا في التتارخانية ناقلا عن الحجة وأجمعوا أن الإقامة قبل الوقت لا تجوز. كذا في المحيط

الفتاوى الهندية (1/53) دار الاحياء التراث العربي

٤ ١٩٩ :-1 وفى الخانية: إذا أذن قبل الوقت يكره الأذان والإقامة ولايؤذن لصلاة قبل الوقت، وقال أبو يوسف والشافعى رحمهما الله: يؤذن لصلاة الفجر فى النصف الأجير من الليل. وفى الحجة: ثم إذا طلع الفجر يعيد الأذان عند حنيفة رحمه الله، وعندهما لايعيد، والفتوى على قول أبى حنيفة رحمه الله. اجمعوا أن الإقامة قبل الوقت لايجوز.

الفتاوى التاتارخانية   (2/148) مكتبة زكريا ، بديوبند ، الهند

(ولا يؤذن قبل وقت ويعاد فيه) أي في الوقت إذا أذن قبله؛ لأنه يراد الإعلام بالوقت فلا يجوز قبله بلا خلاف في غير الفجر وعبر بالكراهة في فتح القدير والظاهر أنها تحريمية، وأما فيه فجوزه أبو يوسف ومالك والشافعي لحديث الصحيحين
1/262 البحر الرائق شرح كنز الدقائق ومنحة الخالق (1/262) المكتبة الماجدية

(قوله: كالإقامة) أي في أنها تعاد إذا وقعت قبل الوقت، أما بعده فلا تعاد ما لم يبطل الفصل أو يوجد قاطع كأكل على ما سيذكره في الفروع.

رد المحتار على الدر المختار (1/385) HM Saeed

تتمة[يشترط لصحة الصلاة دخول الوقت واعتماد دخوله كما في نور الإيضاح وغيره

رد المحتار على الدر المختار (1/385) HM Saeed

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