What Are the Conditions for a Valid Business Partnership?
Clearly defined capital, a profit share stated as a proportion rather than a fixed amount, loss borne in proportion to capital, and a lawful underlying business.
Answers are more useful when you can see the working, so the evidence is set out below.
The evidence
A fixed guaranteed return to one partner converts the arrangement into riba; the profit share must be a percentage.
In mudarabah, one party provides capital and the other labour; financial loss falls on the capital provider while the worker loses his effort.
Allah says in the hadith qudsi that He is the third of two partners as long as neither betrays the other (Sunan Abi Dawud 3383).
In practice
- Write the contract, including the dissolution terms, before starting.
- State profit shares as percentages, never as guaranteed sums.
- Have the structure reviewed by someone who knows both the fiqh and your jurisdiction’s law.
Knowledge that is not acted on has a name in the tradition, and it is not a flattering one. Pick the smallest applicable step.
Go deeper. Thousands of answers, searchable by topic and reviewed before publication, are at Islamic Q&A — qa.hisnulmuslimapp.com.
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Is Zakah Due on Savings, and How Is It Calculated?
Yes. Zakah is 2.5% of savings held for one lunar year that meet or exceed the nisab, which is the value of 85 grams of gold or 595 grams of silver.
Can I Take Out Insurance?
Conventional commercial insurance is held impermissible by most contemporary fiqh councils due to gharar and riba. Takaful (cooperative insurance) is the permitted alternative, and legally mandated insurance is treated as a necessity.
Can Zakah Be Given to Family Members?
It can be given to eligible relatives who are not your direct dependants — siblings, aunts, uncles, cousins. It cannot be given to those you are obliged to maintain: parents, grandparents, children and grandchildren.
Is a Mortgage Permissible if There Is No Islamic Alternative?
Conventional interest-based mortgages are prohibited by the clear texts on riba. A minority of contemporary scholars permitted them under strict necessity where no alternative exists; the majority did not, and the availability of Islamic finance has narrowed that argument considerably.