Question Summary:
Mutharaba/Musharakah

Question Detail:

AS SALAAM WALIKUM
 
I LIVE IN CANADA, I AM AN IMPORTER,
I IMPORTED ONE SHIPMENT OF FOOD PRODUCTS FROM PAKISTAN AROUND CAN $22000.
I INVESTED CAN $12000 AND REST MY BROTHER INVESTED IN MY SHIPMENT CAN $10000.
BUT HE WAS LIKE SLEEPING PARTNER, I DID ALL THE WORK I WENT TO STORES TO SELL MY PRODUCTS I COLLECTED ALL THE MONEY I DID ALL LABOUR WORK MARKETING EVERYTHING I USED MY CAR TO DELIVER THE PRODUCTS.
MY QUESTION IS THAT MY NET PROFIT IS AROUNT CAN $4000 WHAT WILL BE THE SHARING RATIO BETWEEN ME AND MY BROTHER.
HOW MUCH SHOULD I GIVE TO MY BROTHER.
 
THANKS

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
It is important to educate oneself with the relevant Islamic laws of any business juncture from the very inception.
The deal between you and your brother is known as shirkah. It is necessary to determine the percentage of profits that each partner will be entitled to from the very onset. Failure to do so makes the partnership null and void. (faasid).
You did not determine your profits from the inception of your partnership, therefore your partnership has become faasid. The ruling for a partnership that becomes faasid is that the profits will have to be shared proportionate to capital contribution.[i]
In the enquired situation, the sleeping partners’ capital is 45.45%. Thus his share will be 45.45% of the profit. 
Hereunder are a few guidelines you may refer to for the future.
1)    The profits derived from a business venture are in lieu of the capital or the risk or the labour.[ii]
2)    In cases where there is a sleeping partner, the sleeping partner can only have a share ratio of the profits proportionate to his capital investment or less.[iii]
3)    In future, you should specify and determine everything before entailing into a partnership. The best thing would be to sign a memorandum of agreement which stipulates every aspect of how the business shall be conducted.
4)    You say you did all the work and labour, it would be advisable to increase your profit percentage slightly which will be in lieu of your effort. This should be done so that you do not feel your effort have gone uncompensated.
And Allah Ta’āla Knows Best
Imran Patel
Student Darul Iftaa
Zambia
 
Checked and Approved by,
Mufti Ebrahim Desai.