It is permissible for a Muslim to become a partner in a commercial company when the source of funds provided by other partners may vary, with some legitimately earned and some borrowed at interest. However a condition applies here: The loans must not be secured against a mortgage of the company’s assets. Moreover, the Muslim partner must have the authority to run the business, or to be able to monitor its activities to ensure that they are consistent with Islamic law. This is the ruling stated in Fatwa No. 1-16 of the European Council for Fatwa and Research. The late Shaikh Abd al-Azeez ibn Baz said in his relevant fatwa: In principle, it is permissible for a Muslim to be in partnership in a commercial enterprise with a non-Muslim, provided that such partnership does not lead to a relationship of alliance or to commit or neglect something God has forbidden or made obligatory. Moreover, the Muslim partner should be the one who is in control. Nevertheless, it is preferable not to have such a partnership but rather to seek Muslim partners.
