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Fatwa CenterInvestment with the guarantee of capital money plus profit
Question
I have a manufacturing business and due to shortfall of capital I want to seek an investment from some one. If I seek investment such as Rs. 100000/- from a person for a period of one month without fixing any percentage of profit and saying that total of profit earned through this Rs. 100000/- will be divided equally between us. Although, I calculate the profit on investment on the basis of difference in the rates of raw material purchased on cash and on credit due to which the chances of loss is very low. But actually I utilized this amount Rs. 100000/- in payment of my credit debt. And after one month I return that investment with some profit for e.g. Rs. 2500/-. Is such type of transaction or investment comes under the head of sood and the profit earned from it is Halaal or Haraam for both of us, please guide me according to Shariah as soon as possible.
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.
The case that you mentioned is neither partnership nor co-partnership as there is a guarantee for the capital money on top of paying an extra amount when giving it back. This contradicts the principle of partnership in Islam, which is to share the profit and loss. There is no doubt that taking an amount of money and paying it back with an additional amount is Ribaa (usury and interest) itself. In addition to this, this method contains some cheating for the owner of the capital money as you pretended to work with his money while you intended to use it for your personal need in repaying your debts with it.
Allaah Knows best.
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