The mudarib shares in the profit, not in the loss

Question

Question: Zayd and Bakr have entered into a trading partnership on the condition that the money is Zayd’s and the labour Bakr’s; it was agreed that profit and loss would be half and half. If Bakr took out the zakat on the original sum, that is, on the capital (ras al-mal), from the money of the owner, that is, Zayd, in his presence, but did not make it clear whether this sum was from the profit, or only from the original owner’s share of the profit — given that the profit of the owner, that is, Zayd, is also…

Answer

This transaction is fasid (vitiated): in a mudaraba the one who works (the mudarib) shares only in the profit and does not share in the loss. The money that was given out under the name of zakat has not discharged the zakat of the actual owner (rabb al-mal), Zayd; however, if Zayd gave permission, it is valid.

Source: Fatawa Mahmudiyya

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