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Principles Of Doing Business
If two people are cooperating in some work. One is investing and the other doing the work. If both parties agree that the investor will get a fixed percentage from profit. And he will have no share in the loss. Is such contract valid according to islamic shariah
What are the basic principles on which such contracts should be done between two parties.
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7 Replies
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Principles Of Doing Business
updated 4 years, 3 months ago
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7
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In my understanding contracts can be made according to whatever is agreeable to the two parties and does not include anything immoral. From the terms you have described, the investor doesn’t seem to be investing, but lending money. Depending upon other terms and conditions, in this situation it might constitute riba, which is absolutely not permissible.
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Soo such terns in which the investor is not involved in loss is lending and not investing. Isnt this the same principle on which people are putting their money in the saving accounts and receiving profit without being involved in any loss. And also the profit is fixed by some percentage. How such transitions then do not follow in the riba category
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Please watch
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Well according to ghamdi sahab investing on a fixed profit is not prohibited and its not necessary that parties should be involved jn loss and profit i.e mudarabah. And also for banking to be Islamically ok we have to consider it as investing rather than lending money. Do you agree on these points with ghamdi sahab.
Secondly my question is also regarding these terms such as mudarbah, musharakah, murabaha that our fiqh has introduced for businesses. What are the basis of these as such instructions are not mentioned in quran. So the basis of these are in hadith? Is there any clip of ghamdi saab addressing these terms??
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“Well according to ghamdi sahab investing on a fixed profit is not prohibited” .. how is it different from earning interest by giving to any man than earning interest on a fixed deposit ? Can you please give the link where Ghamidi saab says it ?
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These terms Musharakah, Mudarbah, Murabaha are just names given to different kinds of business arrangements which in the view of fiqh are acceptable arrangements on the basis of overall framework of religion.
Ghamidi Sahab hasn’t discussed these terms separately (not to my knowledge) but all these terms can be evaluated on the basis Islamic principles of doing any economic dealing or transaction for that matter.
Although, Ghamidi Sahab has expressed his views on mortgage loans many times, for which you can refer to the following thread:
In addition to this, Ghamidi Sahab also holds view that banks can do Principal-Secured financing without getting involved in loss of the business and for investment purposes, one investor can agree an estimated average fixed amount per month (which is an average of both profit and loss) with the other partner. For further details, please refer to the following video from 1:15:48 to 1:20:12
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