QUESTION:

As Salaamu Alaikum,

Husband and wife went into business 50/50

Business was not making much money, no profit or salary was given to either the husband or wife, whatever profit made, was used to pay workers and run the home of the husband and wife for 2 years.

  • Wife was in full control of the business and there was a mishap with the supplier and money was lost.
  • Husband wants back his money invested from the wife saying she crashed the business.
  • QUESTION: Is the wife entitled to pay back the husband that money in which he invested?

 

ANSWER:

 

Wa Alaikum As Salaam,

In the mentioned situation, it must be understood that according to the Islamic law regarding investments, all parties who invest into a business must agree to share both the profit and loss of the business. With respect to the profit of each business partner, it must conform to the ratio of the capital invested by him or any other ratio mutually agreed upon by the business partners. In the case of loss, each business partner shall bear the loss in accordance to the ratio of his investment.

As such, seeing that both the husband and wife went into the business 50/50, it means that each will benefit 50 % from the profit of the business except otherwise stated and mutually agreed upon. With respect to loss in the business, each party will suffer loss up to 50/ % of the business.

The statement that the wife was in full control of the business, shows that besides being a business partner, the wife also became the manager (Mudharib) of all the funds (of the business). Although this occurred, the husband still had ‘a rightful input’ in the business with respect to where and how the funds should be invested, except if he gave up that right and decided to become a total sleeping partner (in the business). In this case, the wife would become the working partner and the manager of the business.

Based on what you have mentioned, it shows that some profits were made, but were used for expenses related to paying workers and running your home. Although profits and salaries were not officially taken or received by each party, they however benefited from the profit generated from the business. Now that a mishap has come about and the monies are lost, it means that the business has suffered a loss.

In this case, seeing that the wife was in full control of the business and was the sole manager (Mudharib) of the funds to be invested in that business, if it suffered a loss on account of her negligence and mismanagement, then she will be responsible for the failure of the business, and will have to pay back the husband the money he invested.

If however, the business suffered a mishap/loss due to other reasons, and there was no negligence and mismanagement on her part, then both parties will absorb the loss equally, and the wife will not be required to pay back the husband what he invested.

 

And Allah Knows best

(Mufti) Waseem Khan

22/9/2023