Q:
I am participating with other three partners in a farm. We agreed that I will pay the capital while they will manage it. I have already paid 200,000 riyals for this. We agreed that the profit and loss will be divided into four shares, with each of us having a one-quarter share. Is this contract valid and permissible?
Kindly direct us, may Allah best reward you and grant you success.
A:
This is known in Islam as a partnership in farming between you and them, with you paying the capital (Part No. 11; Page No. 161) and them doing the work. The profit should be distributed between you and them, with each of you receiving your appointed share according to your agreement. If there is no profit, you will lose your capital while they will lose their efforts; they will not be required to compensate you for any loss.May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.
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