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  • Investment In Profit Of A Business Not Loss

    Umer updated 1 year, 9 months ago 3 Members · 5 Replies
  • Dr. Irfan Shahzad

    Scholar May 12, 2022 at 4:22 am

    Yes. There is nothing ethically wrong in it. All trades and business transactions are lawful unless there is something ethically questionable in it.

  • Ahmad Zia Jamili

    Member May 12, 2022 at 12:54 pm

    Thanks Dr Irfan ab,

    Then what about investing money in bank is it not prohibited too? is there anything questionable ethically if it is prohibited?

    • Umer

      Moderator May 13, 2022 at 4:41 pm

      Since bank’s primary source of Income is based on Riba, therefore, it is considered prohibited to take any share from that income.

      Please see the following response of Ghamidi Sahab:

      Discussion 32234 • Reply 33115

  • Umer

    Moderator May 13, 2022 at 4:52 pm

    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.

    Discussion 60332 • Reply 60411

    Discussion 60332 • Reply 60501

  • Umer

    Moderator May 22, 2022 at 5:27 pm

    For further comments of Ghamidi Sahab, please also refer to the video below from 19:35 to 24:16

    https://youtu.be/tOI_yWiJYAA?t=1175

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