Debt and Loan: Sharing Business Profits Between Lender and Borrower

Practical Laws of Islam as per the teachings of Imam Khamenei

Debt and Loan: Sharing Business Profits Between Lender and Borrower

English:

Question #1760:

Someone borrowed a sum of money to set up a business. If the business proved a success and made profits, is it permissible for the borrower to give the lender a share of the profits? And is it permissible for the lender to demand from the borrower a share of the profits?

Answer #1760:

The lender has no right in the profits generated by the business. Nor has he any right in demanding from the borrower any share of these profits. However, if the borrower decides, of his free will, i.e. without any prior agreement with the lender, to pay him some money over and above the amount of the debt as a favour, there is no objection to that, rather, it is mustaḥabb.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Debt and Loan