One partner selling goods to the partnership at a profit

Q: One of my friends wants to open a store with me in a partnership. We will share the profits equally by each of us receiving 50%. However, my main store will supply stock for this store at a small profit to me only (to cover transport costs, wages for my workers who will be loading, offloading, marking, etc.). What is the Shar’ee perspective regarding this arrangement?

A: If both of you are investing wealth in this business and sharing the profits equally, it will be permissible. It is permissible for your main store to supply stock for this store, provided there is no coercion found and the purchase is in the interest of all the partners.

And Allah Ta'ala (الله تعالى) knows best.

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Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)


Q: I won't go into 50 50 partnership with my friend but thinking of a franchise store of my main one. He will use my store name and I will help him financially to setup with fixtures and fitting which he will pay after he is making a profit. I will also make a ruling that as long he is using my store name he will have to buy from the main branch all his stock. He will keep all the profit from this business. He is still willing to share the profit 50 50 with me and buy all the stock from the main business only but because of the ruling you gave me previously I decided to forego the 50% share he was offering me in his business

 

A: You cannot bind him to only buy stock from you.

And Allah Ta'ala (الله تعالى) knows best.

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Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)


Q: So how do franchise stores become halaal when binding a store to only buy from them or companies linked with them

 

A: These conditions are invalid.

And Allah Ta'ala (الله تعالى) knows best.

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Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)


Q: What do you advise that we do to make the business venture Islamically correct? 

 

A: Start your own company.

And Allah Ta'ala (الله تعالى) knows best.

 

Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)