Partnerships are of two kinds:
(a) Shirkat-e-Imlâk: Examples: (1) A person passes away and there are several inheritors to his estate. (2) Two persons contributed an amount of money and purchased one item. (3) One person gave a gift to two persons.
The rule with regard to such a partnership is that no one has a right to do anything with the item without the permission of the other.
(b) Shirkat-e-‘Uqûd: Two persons made a mutual agreement that they will conduct a business together. The categories and rules of such a partnership are as follows: Read more... (902 words, estimated 3:36 mins reading time)
1. A person passed away and left behind some wealth. All his wealth will fall under the partnership of all his rightful inheritors. As long as permission is not obtained from all the inheritors, no one can take it for his personal purposes. If anyone takes it and uses it, he will be sinning.
2. Two women got together and purchased a utensil. This utensil will now be under their joint partnership. One of the women cannot use it or sell it without the permission of the other. Read more... (1096 words, estimated 4:23 mins reading time)
1. It is a major sin to take an item which belongs to a person forcefully or in his absence. Some women take items that belong to their husbands or other relatives without permission. This is also not permissible. If you take an item without permission and you still have it in your possession, you will have to return that very item. However, if you have already used that item then the rule is that if the same item could be purchased from the bazaar, it will be wâjib on you to purchase it and replace it. Such items are: grain, ghee, oil, money, etc. If the item is such that its exact replica cannot be obtained, then you will have to give money equal to the value of that item. Such items are: fowls, goats, guavas, oranges, pears, etc. Read more... (663 words, estimated 2:39 mins reading time)
1. You gave some money to a person in order to conduct some business. You told him that he should conduct some business and the profits that accrue from there will be shared between the two of you. This is permissible. This is known as mudârabah. However, there are several conditions for this. If these conditions are fulfilled, it will be valid. If not, it will not be permissible and will be regarded as fâsid. The conditions are: Read more... (617 words, estimated 2:28 mins reading time)
Q. If banking is based on interest-free transactions, what would be its basic practical shape in conformity with the injunctions of Islam?
A. Practically, the interest-free banking system can be structured on tripartite arrangement, between depositors, banks and borrowers. The nature of arrangement will very in different cases as summarised below : Read more... (247 words, estimated 59 secs reading time)
1. A transaction which is not considered in the Sharî‘ah , which is regarded as useless, and regarding which one will say that it is as if the person did not even purchase the item and the seller did not even sell it, is referred to as bâtil or invalid. The rule with regard to such a transaction is that the person who purchased the item does not become its owner and that it is still considered to be under the ownership of the seller. Therefore, it is not permissible for the buyer to consume it or to give it to anyone. It is not permissible for him to utilise it in any way. Read more... (1014 words, estimated 4:03 mins reading time)
Furthermore, if any of the partners will be doing more work than the others, it should be established as to whether he would be doing this extra work on a voluntary basis, or will he be compensated for the extra work. If he will be compensated, will it be in the form of an increased share in the profits, or will it be in the form of a specific amount of salary? In short, every aspect pertaining to the duties and rights of each partner must be clearly written down so that no ambiguity remains. Read more... (212 words, estimated 51 secs reading time)
Therefore if more than one person works in the same business, it should be established from the very beginning as to what each one’s position in the business is. If a son has joined his father in the business, it must be established from the very first day as to whether he is merely helping his father as a favor, or whether he is an employee, or has he joined as a partner? If he is just an employee, his salary must be clearly stipulated. It must also be clearly mentioned that the son in this case has no share whatsoever in the ownership of the business. If he is being made a partner, firstly it is a condition that he invests something into the business. If the son does not have any capital of his own to invest, the father could give him an amount as a gift. He would then invest this amount into the business and purchase a share therein. All these matters should be reduced to writing in the form of a partnership agreement. The share of profits that each partner would be entitled to should also be explicitly mentioned so that there is no problem later on.
Often several brothers are partners in the same business. At times the father and sons are in the business together. Without any records being kept, all the “partners” take their expenses from the business and spend as they wish. However, the position of each person in the business is not clearly determined. For example, is the son or brother merely an employee in the business, or is he a partner? If he is an employee, what is his salary? If he is a partner, what is his percentage share of the profits? Without any of these aspects being clarified, each one draws from the business as pleases. If anyone dares to suggest that these aspects need to be clarified, his suggestion is frowned upon. This suggestion is regarded as contrary to the dictates of mutual love and unity. Read more... (442 words, estimated 1:46 mins reading time)