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There is no problem if the owner(who has paid the capital to run the business) gives his money to the person who wants to buy and sell and trade and divide the profit as a percentage. Making a contract on the basis of percentage is correct in the mentioned question but in the form of digits like putting a condition that you should receive let’s say $100 every month, in this case it will be Haram.

So you can start the business by paying the amount and your partner can run the business with the contract that each will receive 50% of the profit

Sleeping Partnership (Mudārabah) according to Ayatullah al-Udhma Sayyid Ali Sistany:

Ruling 2228. A sleeping partnership is a contract between two people in which one of them, the ‘owner’ (mālik), provides capital to the other, whom we call the ‘worker’ (Aāmil), so that he may trade with it and the profits be divided between them.

The validity of such a transaction (muāmalah) is conditional upon the following matters:

1. offer and acceptance; in expressing these, any word or action that conveys their meaning is sufficient;

2. the parties must have reached the age of legal responsibility (bulūgh), be sane (ʿāqil), and have the ability to take care of their wealth and use it in a correct way (rushd). They must also enter into the agreement of their own volition (ikhtiyār). With regard to the owner specifically, it is a condition that he must not be prohibited from having disposal over his property (al-mahjūr ʿalayh) by a fully qualified jurist (al-Hākim al-sharʿī) due to bankruptcy. This condition does not apply to the worker except in the case where the agreement requires him to have disposal over property that belongs to him but which he is prohibited to have disposal over;

3. the share of the owner and the worker from the profit must be specified in terms of a fraction, such as a third, a half, or any other fraction. But this condition does not apply when the share of each is customarily determined in the market such that it is commonly understood that there is no need to state this condition. Furthermore, determining the share of each by stating an amount of the capital, such as £10,000, is not sufficient. However, once the profits become evident, one of them can reach a settlement (Sulh) with the other with respect to his share for an amount of the capital;

4. the profits must only be shared between the owner and the worker. Therefore, if a condition is stipulated that some of the profits will be given to another person, the sleeping partnership is invalid (bātil) except if it is in exchange for some work relating to the sleeping partnership;

5. the worker himself must be able to trade, in the event that a restriction is mentioned in the contract that he must conduct the trade himself. For example, if it is said, ‘I give you this money so that you personally trade with it yourself’ and the worker is unable to do so, the contract is void (bātil). But if conducting the trade himself is mentioned as a condition [as opposed to a restriction] in the contract – for example, it is said, ‘I give you this money so that you trade with it on condition that you yourself do it’ – and the worker is unable to do so, the transaction is not void. However, the owner has the option (khiyār) to rescind (faskh) the contract in case the worker does not conduct the trade himself. Furthermore, if the contract mentions neither restriction nor condition but the worker is unable to trade even by appointing someone else, the contract is void. And if he is able to trade at the beginning but becomes unable to do so later on, the contract is void from the time he becomes unable.

Read more rulings regarding Mudarabah(sleeping partnership) on: www.sistani.org/english/book/48/2314/

May Allah(swt) grant you success

Wassalam,

Syed Haider