In the name of Allāh, Most Gracious, Most Merciful

Assalāmu ῾alaykum wa Rahmatullāhi Wabarakātuh

The underlined principle with regards to profit and loss in partnership and business investments is:

الربح على ما شرطا والوضيعة على قدر المالين

The profit is based on the agreement of the parties, but the loss will always be proportionate to the capital investment.

Hence, the condition that the capital is guaranteed at the time of loss is impermissible. If you have given 50% of the capital, you will be liable of 50% of the debt if the investment suffers a loss.

Hereunder is the link to a detailed article written by one of the students of the Darul Ifta.

http://www.al-inaam.com/fataawa/shares_stocks/shares_stocks.htm

And Allāh Ta῾āla Knows Best

Wassalāmu ῾alaykum 

Ml. Rayhaan Docrat,
Student Dārul Iftā

Checked and Approved by:

Mufti Ebrahim Desai
Dārul Iftā, Madrasah In῾āmiyyah

________________________________________________________________________
Visit us at:
http://www.al-inaam.com                                                  [ Madrasah In῾āmiyyah ]
http://www.askimam.org                                            [ Dārul Iftā - Madrasah In῾āmiyyah ]
http://groups.google.com/group/shariahcompliant     [Shari῾ah Compliant Business Campaign]
http://groups.yahoo.com/group/shifaa                                [As-Shifā` Islamic Forum]
http://groups.yahoo.com/group/ulama_sa                                [Ulamā-SA Islamic Forum]

DISCLAIMER - Askimam.org questions

The Askimam.org Site answers issues pertaining to Shariah. Thereafter these questions and answers are placed for public view on www.askimam.org for educational purposes. However, many of these answers are unique to a particular scenario and can not be taken as a basis to establish a ruling in another situation or another environment. To ensure this Askimam.org will start to flag such questions. Previous questions on Askimam.org do not carry such cautionary message.  Askimam.org bears no responsibility with regards to these questions being used out of their intended context.

·          The Shar῾ī ruling herein given is specifically based on the question posed and should be read in conjunction with the question.

·          The Dārul Ifta bears no responsibility to any party who may or may not act on this answer. The Dārul Iftā being hereby exempted from loss or damage howsoever caused.

·          This answer may not be used as evidence in any Court of Law without prior written consent of the Dārul Iftā.

·         Any or all links provided in our emails, answers and articles are restricted to the specific material being cited.Such referencing should not be taken as an endorsement of other contents of that website.