Book of Partnerships

Chapter: The Legal Rulings on Partnership and Its Various Forms

Because people engage in it so frequently, one must be acquainted with the rulings that govern partnership. Joint ventures in trade and other fields continue unabated among mankind; they are a means of mutual cooperation for securing benefits, growing wealth, investing it, and exchanging expertise.

The legitimacy of partnership in commerce and in other pursuits is affirmed by explicit texts from the Quran and the Sunnah.

Allah the Exalted says, “Yet, indeed, many partners wrong one another” (Q 38:24). The word khulatāʾ refers to partners, and “wrong one another” means that some of them oppress others. The noble verse thus indicates the permissibility of partnership while prohibiting a partner from wronging his fellow partner.

The Sunnah likewise establishes its permissibility. The Prophet (peace and blessings be upon him) reported that Allah said: “I am the third of two partners”—meaning that He is with them, protecting, caring for, assisting them, and sending blessing upon their trade—“so long as neither of them betrays the other; but when one betrays the other, I withdraw from them,” that is, the blessing is lifted from their business.