Is it permissible for two partners in a Mudarabah contract to have unequal shares of the profit?

General Chapter

Al-Mughni

Book of Partnership

Book 18 · Issue 2 · Bab 1

Open in Qurani

Primary text

If the condition is that one partner receives one-third of the profit and the other receives one-fourth, with the remainder going to the capital provider, the contract is valid. This view is held by Abu Hanifa and Al-Shafi'i. The justification is that the contract with two individuals is conceptually two separate contracts, allowing for differing stipulations in each, similar to individual contracts. Furthermore, since both partners contribute work (labor) and are compensated for it, inequality in compensation is permissible, analogous to hired laborers whose contributions may differ. The assertion that equality must exist in a partnership based on labor (Shirkah al-Abdan) is rejected; rather, it mirrors this case where differentiation in profit is permitted.

Supporting text

Malik prohibits this arrangement because the partners are jointly contributing their physical labor (Shirkah al-Abdan), and therefore, inequality in profit distribution among them is impermissible, just as it is impermissible in a partnership based purely on labor.