Question: I want to start a business with a friend of mine by entering into partnership contract, with a capital amount of £40,000. I will contribute £22,000.00 and manage day to day task in the business and my partner will provide £18,000.00 only as a sleeping partner. However he is demanding 50% share of profit should be distributed amongst us. Is this authentic method in Islam for a partnership contract as above?

Answer: If your partner is contributing less than 50% capital and not participating in day to day business management, he cannot demand equal share in profit which is not permissible in Shariah. As per his capital contribution, he can take a profit of up to 45% and not more than that. Alternatively, if he also contributes in managing the business then profit can be equally shared despite his less contribution in capital money.

References: [1] Badaius Sanai vol-5/83 [2] Al-Bahrur Raiq vol-5/272 [3] Al-Mabsut as-Sarakhsi vol-11/159