Liability for Profit Sharing, Its Profit and Expenses ( Al-Mudarabah )

“About the case of a man who gives a certain amount of asset to another man and tells him to go to so and so city and not beyond it then buy from it goods, abu ‘ Abd Allah (a.s.), has said, ’If he goes beyond and the asset is destroyed, he is accountable and if he buys goods and it depreciates it is his responsibility; but if it makes profit it is for both parties.’”

“I once asked one of the two Imam, (abu Ja’far or abu ’Abd Allah), ‘Alayhim al-Salam, about the case of a man who gave a certain amount of assets to another man for Mudarabah (profit sharing) and prohibited him from taking it out with him, but he went out. He (the Imam) said, ‘He is held responsible for the assets and the profit is for both.’”

“Abu Ja’far (a.s.), has said that ’Amir al-Mu’minin has said, ’If one uses a certain amount of assets in business with stipulation for half of the profit, he is not liable.’ He (the Imam) also said, ‘One who holds a merchant responsible he can only have his capital and has no share in the profit.’”

“Abu ‘Abd Allah (a.s.), has said that about the case of a man who owed a certain amount of assets to another man who demanded it but he did not have it, then told him to keep it as capital for Mudarabah (profit sharing), ’Amir al-Mu’minin, has said, ‘It is not valid until he takes possession.’”

“About the case of Mudarabah (profit sharing) abu al-Hassan (a.s.), has said, ‘Whatever the trading party spends during his journey is from all of the assets, but when he arrives home thereafter whatever he spends is from his own share.’”

“This is concerning my question before abu ‘Abd Allah (a.s.), about the case of a man who had a certain amount of assets for Mudarabah (profit sharing) with him but made very little profit; and was afraid of the other party’s taking away the capital, so he paid him more than the amount stipulated, so that he would not take the capital away. He (the Imam) said, ‘It is not unlawful.’”

“About the case of a man who works for Mudarabah (profit sharing), abu ‘Abd Allah (a.s.), has said, ‘He can have (his share of) the profit but is not liable for depreciation (loss) unless he violates the instructions of the owner of the assets.”’

“This is concerning my question before abu ‘ Abd Allah (a.s.), about the case of a man who gave one thousand dirham to another man for Mudarabah (profit sharing) and he bought his father without knowing. He (the Imam) said, ‘He is appraised, even if a single dirham remains extra (as profit), he is free while it has spread into the assets of the man.’”

“Abu ‘Abd Allah (a.s.), has said that ’Amir al-Mu’minin, about Mudarabah (profit sharing), has said, ‘Whatever he spends during his journey is from the whole of the capital, but when he is back home then whatever he spends is from his own share.’”