I am the sole investor in a business.

Answer

This type of venture is termed Mudhaarabah. In the Mudhaarabah partnership the active partner (the manager) will be entitled to his percentage share of the profit. If it is 50%, then he shares 50% of the profit. He does not become 50% owner of the business. The capital investment remains the property of only the investor.

The active partner may be given a bigger share of the profits. If his share of the profit is 75%, then in the event of loss, he will have to sustain 75% of the loss, but from profits. For example, if the profit last year was R100,000, then his share of the profit was R75,000. If this year there was a loss of R40,000, then from the previous year's R75,000, he has to return R30,000.

The initial capital remains in the business and will always remain the property of the investor. If the initial capital is withdrawn or paid from the business to the investor, then he (the investor) ceases being a partner. The whole business will then belong exclusively to the active partner since withdrawal of the capital terminates the partnership.