How should profit and loss be distributed in 'Inan partnership (mutual capital and labor)?
General Chapter
Al-Mughni
Book of Partnership
Primary text
In the 'Inan partnership, where partners contribute capital, it is permissible for the profit distribution to be based on the proportion of the capitals, or for the partners to share profits equally despite unequal capital contributions, or for them to share profits disproportionately despite equal capital contributions. This view is held by Abu Hanifah. The justification is that labor entitles the partner to profit, allowing for disproportionate profit shares when labor contributions differ, similar to joint investment managers working for one principal.
Supporting text
Malik and Al-Shafi'i stipulated that for the partnership to be valid, the profit and loss must be distributed strictly according to the proportion of the capital contributions, because profit in this partnership is secondary to the capital. They argue that profit cannot be altered by condition, unlike loss, which is tied only to capital.