Must the two capital contributions in a partnership be of the same monetary type?

General Chapter

Al-Mughni

Book of Partnership

Book 18 · Issue 3 · Bab 1

Open in Qurani

Primary text

It is not required for the validity of the partnership that the two capitals be of the same monetary type; it is permissible for one partner to contribute dirhams and the other dinars, as ruled by Ahmad, Al-Hasan, and Ibn Sirin. This is because both are kinds of currency (athmān). Upon dissolution, each partner reverts to their original type of currency, and then they share any surplus profit.

Supporting text

Al-Shafi'i held that the partnership is invalid unless both parties contribute capital of the same type, based on the premise that mixing the two capitals is a condition for validity, which is only possible in a single monetary type. Some followers of Al-Shafi'i suggested that upon dissolution, the assets should be appraised in the local currency, and the other partner's capital should also be valued based on that appraisal.