What is the ruling if a partner incurs debt on behalf of the partnership?
General Chapter
Al-Mughni
Book of Partnership
Primary text
A partner is not permitted to borrow money against the partnership assets. If they do so, the debt belongs solely to them, and the profit derived from it is theirs, but the loss (wadi'a) is also theirs. Ahmad, in the narration of Salih, ruled that if someone borrows a thousand against the capital in a proper manner, it is considered his personal debt with profit and loss belonging to him. The reason supporting this is that the partner introduced into the partnership an amount exceeding what the partner consented to, which is impermissible, similar to adding one's own money.
Supporting text
Al-Qadi ruled that if something is borrowed, it becomes binding upon both partners, and the profit belongs to both, comparing it to exchange (Sarf). This contradicts the narration from Ahmad. The distinction from Sarf (exchange) is that Sarf involves the exchange of an asset for an asset, whereas borrowing is introducing external capital.