How is capital reduced when the capital provider takes a portion after a profit has been made?
General Chapter
Al-Mughni
Book of Partnership
Primary text
When the capital provider takes a portion of the capital after a profit has been realized, the amount taken is considered to be from both the profit and the principal capital. If the principal was 100 and a profit of 20 was made, and the capital provider took 20 (which is one-sixth of the total 120), the principal capital is reduced by one-sixth of its original value (16 and 2/3), leaving the principal at 83 and 1/3. The profit corresponding to the taken principal share (1/6 of 20) is also settled.
Supporting text
If the capital provider takes half of the combined capital and profit (e.g., 60 out of 120), the principal capital is reduced by half, leaving 50. If he took 50, the remaining capital is 58 and 1/3, as he took one-fourth and one-sixth of the original capital.