Silent Partnership: Demanding Fixed Profit from a Jeweler in an Investment Deal

Practical Laws of Islam as per the teachings of Imam Khamenei

Silent Partnership: Demanding Fixed Profit from a Jeweler in an Investment Deal

English:

Question #1890:

I gave a sum of money to a jeweler to invest in buying and selling. Since the jeweler always makes a profit, i.e. without a loss, is it permissible for me to demand from him the payment of a certain amount of money by way of profit? If this proves problematic, is it permissible for me to take some items of jewelry instead of the profit? Should there still be a problem; can the payment of the profit be made to me through an intermediary? And finally should it still be problematic, can the payment of the money be made to me by way of a present?

Answer #1890:

For the silent partnership to be operative, the determination of the share of profit due to the money owner and the working partner should be made by any ratio, such as one third, one fourth, one half, etc. In other words, the partnership shall not be sound if it is entered into on the basis of the monthly payment of a certain amount of money to the owner as a profit of the capital he provided, irrespective of whether the monthly amount is paid in cash or in goods. Whether the owner received the amount of money directly or through an intermediary is immaterial. The same goes for the receipt of a certain amount of money as a share of the profit or by way of a present from the working partner in return for trading with the owner’s money. However, there is no objection to stipulating that the owner may receive monthly a portion of the profit on account, after it is made, so that the exact amount is calculated at the end of duration of the silent partnership.

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