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Subject : Partners should be Liable to Loss, each according to his Capital

Fatwa Number : 3229

Date : 06-10-2016

Classified : Partnership in Business

Fatwa Type : Search Fatawaa

Question :

What is the ruling of Sharia when loss is incurred in shared materials; should partners be liable to that loss?

The Answer :

All perfect praise be to Allah, The Lord of The Worlds, and may His peace and blessings be upon our Prophet Mohammad and upon all His family and companions.

In principle, loss should be borne by all partners, each according to his share in the capital, and Muslim scholars have unanimously agree that it isn`t permissible to make a partner bear more than his share in the capital, in case of loss. According to Ibn Qodamah: "Loss should be borne by partners, each according to his share in the capital: half, third, etc., and this is agreed upon by all scholars.{Al-Moghni, p.5/25}.

However, if loss resulted from the misconduct of one of the partners, then he should guarantee that loss accordingly. Since a partner is supposed to be honest, guarantee is required from him only in case of misconduct and negligence. And Allah knows best.



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