Question Summary:
One of my friend is having transportation business of arranging bus tour to Madina Munnawra from Jeddah.As he is running this business in the

Question Detail:

One of my friend is having transportation business of arranging bus tour to Madina Munnawra from Jeddah.As he is running  this business in the name of his sponsor ( sponsor dose not have any interfere in business as only his name is used on paper). Now My friend has applied to get license from the government so that he can run his business in his own name.  To get license he need a certain amount to show to the government so for this purpose he has borrowed some money from me & by his own will he has offered 20% parternership in his business based on profit/loss until he return borrowed money back to me . He has given this share of 20% by his own will ( I have not asked for it).  Please advise me  is this halal . And second condition if my friend use this borrowed money for some other business, still this partnership remains halal. Pls. advised 

Answer :

In the name of Allah, Most Gracious, Most Merciful

Assalaamu `alaykum waRahmatullahi Wabarakatuh
 
You will have to decide in which angle you give your friend the money, as a loan or investment in partnership. The implications of both are different. In the case of a loan, you cannot accept any surplus money from him as that will be interest (Riba). If you give the money to your friend as a capital in the transport business, then you can accept the surplus money as a profit in the partnership. The distribution of the profit in the partnership will have to be by mutual agreement. Your friend could offer you any amount of profit 10%, 20%, 50%, 90% etc. If there is a loss in the joint venture, then as a partner, you too will have to bear the loss according to your capital contribution. If your friend took the money on loan he can use it as he wants. If he took it as partnership in one specific venture, he cannot use it in another business venture.
 
And Allah Ta'ala Knows Best


Wassalamu Alaykum


Mufti Ebrahim Desai
Darul Iftaa, Madrassah In'aamiyyah
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