Cash And Kind Capital Contributions In A Partnership
Question
Amar wants to start a partnership with Zaid, he says that I will provide the machinery and you should provide the working capital. Is this permissible?
Answer
According to the Hanafi Madh’hab, in a partnership, the capital has to be in cash form from both partners. If one partner provides cash and the other partner provides kind such as machinery, then such a partnership will not be valid.
To make this partnership Shari’ah compliant, the owner of the machinery should sell half of his machinery to the other partner for a nominal amount and thereafter they should enact a partnership contract.
References (Arabic / Urdu sources)
الشركة إذا كانت بالمال لا تجوز عنانا كانت أو مفاوضة إلا إذا كان راس مالهما من الأتمان التي ا تتعين في عقود المبادلات نحو الدراهم والدنانير فأما ما يتعين في عقود المبادلات نحو العروض والحيوان فلا تصح الشركة بهما سواء كان ذلك رأس مالهما أو رأس مال أحدهما كذا في المحيط
(الهندية ٣٠٦/٢)
(وإذا أرادا) أي الشريكان (الشركة بالعروض باع كل واحد منهما) قال في الجوهرة: صوابه أحدهما (نصف ماله بنصف مال الآخر) فيصيران شريكي ملك، حتى لا يجوز لأحدهما أن يتصرف في نصيب الآخر (ثم) إذا (عقدا الشركة) صارا شريكي عقد، حتى جاز لكل منهما أن يتصرف في نصيب صاحبه،
(اللباب ٠٧/٣ ٣)
- Approved by
- Mufti Muhammed Saeed Motara Saheb D.B.
Where scholars differ, it’s safer to take the more cautious view.
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Source: Darul Ifta, Darul Uloom Azaadville — https://www.iftadua.co.za/cash-and-kind-capital-contributions-in-a-partnership/14663/
Fatawa SA: https://fatawa.co.za/fatwa/azaadville-14663
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