Fatwa #3687110 October 2016India
Are we doing a fair equity sharing which is acceptable as per Shariah?
Question
Assalaamu alaikum warahmatullahi wabarakatuhu.
I am planning to start my own business into software development services with 2 other friends in India. We are seeking major funding from an investor (again a friend) and some funding from each one of us. We 3 are highly experienced professionals from the software industry. As per the strategy we plan to park the initial investment into a bank account and use the funds as needed.
My questions: 1. Since this money would be in a bank account and it would generate interest (riba), how do we manage this dirty money. What is the best way to manage funds and still be available whenever needed.
2. We are planning for 30% - 30% - 30% - 10% equity sharing between (3 tech founders x 30% and 10% for investor). With a 2 yr projection of 4 crore valuation we want to dilute 10% to investor for 40 lakhs and each of the founders invest 15 lakhs each. So my question is are we doing a fair equity sharing which is acceptable as per shariah.
Please guide us on the shariah based equity sharing.
JazakAllah Khair.
Answer
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
1) The money received in the form of interest from the bank is wajibu tasadduq (compulsory to be discharged off) to someone who is entitled to Zakaat.)
2) According to our understanding of the investment scheme, the total value of the partnership will be 85 lakhs. Each founding partner will contribute 15 lakhs. and the investors will contribute 40 lakhs. The profit ratio will be 30% for each founding partner and 10% for the investors. This is Shariah compliant. However, losses will be in proportion to the capital investment. Accordingly, in the case of a loss, each partner will bear 17.647% and the rest of the investors will bear a total of 47.059%
3) In implementing the above scheme, prepare a partnership contract based on the laws of Musharakah and insure that all the clauses are Shariah compliant as well. You may refer to the following link for a Shariah compliant Musharakah sample. http://www.daruliftaa.net/index.php/resources/publications/finish/27-publications/276-musharakah-mudaraba
And Allah Ta’āla Knows Best
Rajeeb Qasimi
Kerala, India
Checked and Approved by:
Mufti Ebrahim Desai
_____________________________
إذا شرطا الربح على قدر المالين متساويا أو متفاضلا، فلا شك أنه يجوز ويكون الربح بينهما على الشرط سواء شرطا العمل عليهما أو على أحدهما والوضيعة على قدر المالين متساويا ومتفاضلا؛ لأن الوضيعة اسم لجزء هالك من المال فيتقدر بقدر المال، وإن كان المالان متساويين فشرطا لأحدهما فضلا على ربح ينظر إن شرطا العمل عليهما جميعا جاز، والربح بينهما على الشرط في قول أصحابنا الثلاثة (بدائع الصنائع 6\62)
كذا في شركة البزازية حيث قال: وإن لأحدهما ألف ولآخر ألفان واشتركا واشترطا العمل على صاحب الألف والربح أنصافا جاز، وكذا لو شرطا الربح والوضيعة على قدر المال والعمل من أحدهما بعينه جاز، ولو شرطا العمل
على صاحب الألفين والربح نصفين لم يجز الشرط والربح بينهما أثلاثا، لأن ذا الألف شرط لنفسه بعض ربح الآخر بغير عمل ولا مال، والربح إنما يستحق بالعمل أو المال أو بالضمان اهـ ملخصا (رد المحتار 8\411)