Question Summary:
Investing in a business

Question Detail:

Assalaamu alaikum !
Alhamdulillah ! we have invented an extraordinary consumer product usable in day-to-day life & highly facilitates the precious principles of Taharah as per Islam. We have patented the same.
We don't have sufficient funds to manufacture & sell the same.
We have called for investors having halaal funds to invest with us on the basis of profit percentage in proportion to their share of investement in our total project.
Please guide /advise us the Do's & Do Not's in such type of business.
What should be our terms & conditions with our investors.
Jazakallahu Khaira !

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
There are different types of investments:
1.      Musharakah- This is a type of partnership where two or more partners invest money into a business and share the profit and loss of that business.
2.     Mudarabah- This is a type of partnership where only one partner will invest the money while the others will carry out the work of that business. The former is known as ‘rabbul maal’ while the latter is known as the ‘mudarib’. All profit and loss in that business will be shared by the partners.
For further details on investing in a business, please see the attached contracts.
 
 
 
And Allah Ta’āla Knows Best
Abdul Hannan Nizami,
Student Darul Iftaa
Chicago, USA
Checked and Approved by,
Mufti Ebrahim Desai.