Partnership: Validity of Partnership When Capital and Effort Are Unequally Shared

Practical Laws of Islam as per the teachings of Imam Khamenei

Partnership: Validity of Partnership When Capital and Effort Are Unequally Shared

English:

Question #1695:

Three people set up a joint business venture. One of them contributed half of the capital and the other two a quarter each. They agreed that the profits should be distributed between them each according to their shares. The two partners, who contributed a quarter each of the capital, run the business full-time, whereas the partner, who owns half of the company’s capital, seldom works. Is this partnership valid?

Answer #1695:

For shareholders, it is not necessary to have equal shares in the investments. However, there is no objection to distributing the profits equally between the partners, regardless of the percentage of their respective shares in the company. As regards running the business, each of them will be remunerated for his work if nothing is stipulated in the contract in this regard.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Partnership