Starting a partnership and supplying goods to the partnership from one's own business

Q: A friend of mines needs help to boost his business so we decided to divide his shop into two. In the one section I will go into a 50 50 partnership with him. We will be a retail store selling blankets, mats, electrical items etc. We as partners won't earn a wage but will share the profit 50%.

The other important info is my main store will supply stock for this store at a small profit to me only (transport costs and my workers will be loading, offloading, marking). My friend has a separate business of his own in the other part of the premises. The option of me just supplying stock to him won't work since he feels he won't be able to manage the store and feels the business will be more successfull with me as a partner. He doesn't have the cash to do the renovations etc. needed to start this venture.

I want to do everything according to sharia. Where can I get all the info needed to draw up the partnership agreement, what's allowed and whats not etc.

A: If both of you are investing wealth in this business and sharing the profits equally, it will be permissible. However, you should not sell to this business as you also own part of the business. We suggest that you sell to someone else and that person may sell to the business that is owned between you and your friend.

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)