No Guarantee of Loss Without Negligence
Fatwa No: 391810

  • Fatwa Date:11-2-2019 - Jumaadaa Al-Aakhir 6, 1440
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Salam. I hve taken money as invstmnt from 4 ppl for business and i didnt not manage it properly and made a loss. One of a partner is asking for the full investment back,but i have very few amount of money left with me after the loss.If i give back his full investment then i cannot settle the full investment of other partners. Hence i have said to him to get 33% of his share now and the rest i will pay back to him by doing business,but he is insisting me to give his full share. If i do so then i cannot do business with the remaining money, which would cause problem for other partners in getting their rights. In this case please advice me


All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) is His slave and Messenger.

If the loss that had occurred in capital money was not due to any negligence on your part, then you do not have to guarantee it, and every partner assumes the loss in his capital money.

If a partner has half of the capital money, then he assumes half of the loss; the one who has one-third (of the capital money) assumes one-third from the loss, and so forth. Ibn Qudaamah  may  Allaah  have  mercy  upon  him said:

"The loss in the company is upon each partner according to his money; if their amount of money is equal [i.e. they contributed equal amounts], then the loss is divided amongst them in halves; if the money is one-thirds [for each partner], then the loss is one-third for each of them. I do not know any difference of opinion among the scholars on this issue.” [End of quote]

Based on this assumption, you should give that partner whatever remained of his capital money and you do not have the right to give him from the money of the other partners.

However, if the loss is due to your transgression and negligence, then you have to guarantee the loss and give that partner the all his capital money. You should cover the loss from your own money and not from the money of the remaining partners. Al-Mubdi’ reads:

If the speculator transgresses the (terms and) conditions (of the contract) or if he did something he is not entitled to do, or if he did not do what he is obliged to do, then he guarantees the money.” [End of quote]

For more benefit, please refer to Fataawa 309238 and 231382.

Allah knows best.

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