Fatwa No : 98359
Ruling on Stipulating a Higher Profit for One Partner in a Joint Business

Ruling on Stipulating a Higher Profit for One Partner in a Joint Business

Assalamu Alaikum wa Rahmatullahi wa Barakatuh,
Respected Mufti Sahib!
My father and his three brothers had a joint business. My father did most of the work, due to which, with the consent of his other brothers, he was allocated a 31% share of the profit in the partnership. The other two brothers were allocated 25.25% each, and one brother was allocated up to 19%. My father and my uncles continued running the business throughout their lives according to these profit-sharing ratios.
In 2022, my father passed away. After my father’s death, my uncles withdrew a substantial amount of money from my account. They explained that the higher profit ratio which my late father had allocated to himself was not correct. However, this profit-sharing ratio had been established with everyone’s consent. My uncles claim that since 2016 they had been telling their elder brother to make the profit-sharing ratios equal.
Respected Mufti Sahib!
My first question is: Since my late father had a 31% profit-sharing ratio for himself with the consent of his brothers, was this arrangement Islamically permissible?
My second question is: After my father’s death, my uncles withdrew from my account the amount that they considered to be the excess profit resulting from my father’s higher profit ratio. Was it Islamically permissible for them to withdraw this amount? If it was impermissible, are they required to return this amount or not?

الجوابُ حامِدا ًو مُصلیِّا ً

It should be clarified that in a joint business (partnership), if all the partners are actively involved in the business as working partners, it is Islamically permissible and valid for the partners, by mutual agreement, to determine different ratios for the distribution of profits and to allocate a greater share of the profit to one partner than to another, even if their capital contributions are equal. This is because, according to the explicit statements of the jurists (may Allah have mercy on them), a person may be entitled to a share of the profit not only on account of his capital, but also on account of his labor, expertise, and skill.
Therefore, if the details mentioned in the question are correct and correspond to the actual facts—that is, if the deceased father of the questioner and his uncles had allocated a greater share of the profits to the questioner’s deceased father than to the other partners because of his knowledge and expertise in business affairs—then this was undoubtedly permissible and valid according to Islamic law. It would not be correct to describe such an arrangement as un-Islamic or unjust.
Accordingly, although in 2016, during the course of the business, the questioner’s uncles demanded an increase in their share of the profits, if no new percentage ratio for profit distribution was formally agreed upon by all the partners through a proper agreement, then merely making such a demand would not entitle the questioner’s uncles to a greater share of the profits. Rather, at the time of the conclusion and settlement of the business, the business profits must necessarily be distributed according to the ratio that had originally been agreed upon.
Therefore, after the death of the questioner’s father, it was not Islamically permissible for the questioner’s uncles to withdraw from the questioner’s account an amount exceeding their rightful share and retain it in their possession. They are obliged to return the additional amount, beyond their rightful share, to the questioner and the other heirs of the deceased father, thereby discharging themselves from liability and accountability in this world and in the Hereafter.

مأخَذُ الفَتوی

«بدائع الصنائع في ترتيب الشرائع»):
«وإن كان المالان متساويين فشرطا لأحدهما فضلا على ربح ينظر إن شرطا العمل عليهما جميعا جاز، والربح بينهما على الشرط في قول أصحابنا الثلاثة، …(وأما) عندنا فالربح تارة يستحق بالمال وتارة بالعمل وتارة بالضمان على ما بينا، وسواء عملا جميعا أو عمل أحدهما دون الآخر، فالربح بينهما يكون على»(6/ 62
درر الحكام في شرح مجلة الأحكام:
المادة :1349: الاستحقاق للربح إنما يكون بالنظر إلى الشرط الذي أورِدَ في عقد الشركة ، وليس بالنظر إلى العمل الذي عُمِل،۔۔۔ويُقسم الربح بينهما على الوجه الذي شرطاه ۔ (ج:3،ص:364)
تبيين الحقائق :
«ولأن الربح يستحق بأحد ثلاثة أمور: بالمال والعمل والضمان…ولأن الحاجة مست إلى اشتراط التفاضل لأن أحدهما قد يكون أهدى وأحذق في التجارة ولا يرضى بالمساواة فوجب القول بجوازه كي لا تتعطل مصالحهم»(3/ 318):