Placing the Loss in a Partnership on One Partner

Question

Zayd gave ‘Amr money and said: “The two of us will trade in partnership, and whatever profit there is will be half and half between us.” After some days had passed, Zayd said to ‘Amr: “I will take one part of the profit and you take three parts of the profit, but on condition that whatever loss occurs in the trade will be borne by you.” What is the ruling on dealing in this way?

Answer

If both of them put in the money, this is a partnership (shirka), and in it placing the loss on only one partner is not correct. If the money is Zayd’s and ‘Amr will do the work, this is a mudaraba, and placing the loss on the mudarib (the working partner) is not correct.

Source: Fatawa Mahmudiyya

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