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(Book 32, Hadith 10) #36453
Investment Expenses and Responsibilities

SUMMARY: An investor should not spend from the capital nor clothe himself from it while he resides with his family. It is only permitted for him to have expenses when he travels for the investment.

Yahya said that Malik spoke about an investor who made a qirad loan to a man. He said, "When the investment is large, the travelling expenses of the agent are taken from it. He can use it to eat and clothe himself in an acceptable fashion according to the size of the investment. If it saves him trouble, he can take a wage from some of the capital, if it is large, and he cannot support himself. There are certain jobs which an agent or his like are not responsible for, amongst them are collecting debts, transporting the goods, loading up and so forth. He can hire from the capital someone to do that for him. The agent should not spend from the capital nor clothe himself from it while he resides with his family. It is only permitted for him to have expenses when he travels for the investment. The expenses are taken from the capital. If he is only trading with the property in the city in which he resides, he has no expenses from the capital and no clothing". Malik spoke about an investor who paid qirad money to a man, and the agent went out with it and with his own capital. He said, "The expenses come from the qirad and from his own capital according to their proportions".

TOPICS
investment  *  expenses  *  responsibilities  *  qard  *  wakeel  *  maal  *  ribh  *  malihaat  *  taklifat

QUICK LESSONS:
Follow responsibilities when investing; Spend money on acceptable fashion according to size; Hire someone else using some of capital; Trade within city where resides

EXPLANATIONS:
This hadith discusses the responsibilities of an investor who has taken a loan, known as qirad, from another person. The investor must not use any of the capital to pay for his own expenses or clothing while residing with his family. However, if he is travelling in order to make an investment, then it is permissible for him to use some of the capital in order to cover his expenses such as food and clothing according to the size of the investment. Furthermore, if there are certain jobs that need doing such as collecting debts or transporting goods which are related to making an investment then it is permissible for him to hire someone else using some of the capital in order to do these tasks on behalf of him. Lastly, if he is trading within a city where he resides then no expenses can be taken from this capital nor can any clothing be bought using this money either.

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