Silent Partnership: Legitimacy of Trading with Guaranteed Monthly Profit and Loss on Borrower

Practical Laws of Islam as per the teachings of Imam Khamenei

Silent Partnership: Legitimacy of Trading with Guaranteed Monthly Profit and Loss on Borrower

English:

Question #1884:

A person gave another a sum of money to trade in it on the condition that he pays the lender a monthly sum as profit and bear the loss. Is this kind of deal legitimate?

Answer #1884:

There is no harm in the agreement between the two parties if it is based on a proper and shar‘ī silent partnership. Nor there is any harm in making a provision in the process that the working partner gives the owner a monthly portion of his proportional share of profit on account and bears the loss.

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