Salam! I have invested some money in a company, i have to do a particular work relating e commerce and in return the company gives a 3% profit on the total money i have invested, i can withdraw my principle and my profit both. I have listened to Mr Javad Ahmed Ghamdi that taking profit on a consumable thing is Haram. I am very worried that whether the bussiness i am doing is right or wrong in Islamic teachings. Kindly help me in this issue!
Demanding profit on loan is Riba (Sood) and is Haram in Sharia. Investment/financing in any company doesn’t fall in this category. You have to decide whether it is a lending arrangement or genuine financing.
Please refer to following response of Ghamidi Sahab:
Ghamidi Sahab is proponent of Principal-Secured Financing as a mode of alternative financing to current lending operations of the Banking Sector. This entails that an investor doesn’t necessarily have to share losses of a buisness from his principal investment amount, which should be kept secure for the financer.
e.g. If the investor is not actively involved in management and day to day operations of the business then he should go for principal-secured financing arrangement, where his principal investment will be secure and returned to him in case of permanent loss, with exceptions to extraordinary circumstances. As for the profits, investor can either agree to split them as a percentage of actual profits or losses (won’t be taking any profit in case of a loss); or investor can agree on a percentage share for estimated profits by choosing a low percentage so that it covers for both profits and losses throughout the years.
To understand further, please refer to the responses of Ghamidi Sahab shared in the following links.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.