Ruling on a Partner Taking Extra Profit for Management Duties
Egypt’s Dar Al-Ifta explained the Islamic ruling on a business partner receiving an additional share of profits for management duties and clarified when a worker may be liable for damaged property.
Egypt’s Dar Al-Ifta has addressed a question concerning the ruling on a business partner receiving an additional share of profits in return for managing the business, explaining the Islamic principles governing such an agreement and the importance of respecting agreed terms and applicable financial regulations.
Ruling on a Partner Receiving Additional Profit for Management
Dar Al-Ifta explained that it is permissible under Islamic law for business partners to agree that one partner will receive an additional share of the profits in return for handling management responsibilities.
The additional profit is permissible as long as the partners have mutually agreed to the arrangement.
The institution noted that this position has been attributed to the Hanafi and Hanbali schools, based on the principle that profit may be earned through capital as well as through work, similar to the concept of mudarabah.
Can Partners Agree on Additional Profit for Work?
Yes. Partners may agree to provide the partner responsible for management with an additional share of profits in return for their work and effort, provided that the arrangement is clearly agreed upon.
Dar Al-Ifta emphasized that the terms must be clear and must not violate Islamic principles or applicable laws.
Dar Al-Ifta Stresses Compliance With Financial Regulations
Dar Al-Ifta stressed the importance of complying with laws and regulations governing financial transactions between individuals and businesses.
The institution cited the Prophetic saying: “Muslims are bound by their conditions, except a condition that makes lawful something unlawful or makes unlawful something lawful.”
This highlights the importance of clearly defining the rights and obligations of business partners in financial agreements in order to protect all parties and reduce disputes.
Ruling on Deducting the Value of Damaged Items From a Worker’s Pay
In a related matter, Sheikh Ahmed Wissam, Secretary of Fatwa at Egypt’s Dar Al-Ifta, addressed the ruling on deducting the value of items damaged during work from an employee’s wages.
He explained the circumstances under which a worker may be responsible for damaged tools or materials.
When Is a Worker Liable for Damaged Property?
The Dar Al-Ifta fatwa secretary explained that tools and materials placed in a worker’s possession while performing their duties are considered a trust.
Therefore, the worker is required to take reasonable care of them and handle them responsibly.
If the worker is proven to have been negligent or careless and that negligence results in the damage or destruction of the items, the worker may be liable for their value, subject to the applicable rules.
When Is a Worker Not Liable?
If the damage occurs without negligence or misconduct on the part of the worker and results from circumstances beyond their control, the worker is not liable for the loss.
Therefore, an employee should not automatically be charged for every item that becomes damaged. The circumstances and cause of the damage must first be considered.
Dar Al-Ifta Emphasizes Fairness
The Dar Al-Ifta official stressed the importance of fairness in such situations.
A worker should not be held responsible for damage they did not cause, while at the same time workers are expected to protect the tools and materials entrusted to them.
This principle is consistent with the Quranic command:
“Indeed, Allah commands you to render trusts to whom they are due.”
Conclusion
According to Dar Al-Ifta, partners may agree to give a partner an additional share of profits in return for management duties, provided that the agreement is clear and complies with Islamic principles and applicable laws.
As for workers, they may be held responsible for damaged tools or materials when the damage resulted from proven negligence or misconduct. However, they are not liable when the damage occurs without fault or due to circumstances beyond their control.
Can a business partner receive extra profit for management?
Yes. Partners may agree to an additional share of profits in return for management work.
Can an employer deduct the value of damaged items from a worker’s wages?
This may be permissible when the worker’s negligence or misconduct caused the damage, subject to applicable rules.
Is a worker responsible for everything damaged at work?
No. The worker is responsible only when negligence or misconduct caused the damage.
Must business partners comply with financial laws?
Yes. Dar Al-Ifta emphasized the importance of complying with applicable laws and regulations governing financial transactions.
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