I am going g-d willing into a partnership. It is on line business to sell vitamins. I would manage the business and my partner would give me his credit card number, expiration date and 3 digit number from the back and authorize me to use it to pay for the business expenses. He would supply office space for the business. He already has an office for another business. He would give me use some his office space to run our vitamin business and hire and pay a customer service staff to answer customer service calls. He would pay them from his checking account. In other words, he would not be giving me a lump sum to invest in our business but will pay for expenses as needed.

The text of a typical heter iska as stated in the link mooli.netau.net/forms/business.html contains “I, the undersigned, have received the sum of $” which indicates that the money is to be received in a lump sum. In addition, the text also states ”Any profits realized or losses sustained shall be shared equally between the investing partner and myself.” and “It is agreed that if I return the above-mentioned principal to the investing partner”.

I do not have personal funds available to do this. (I have some funds but they are set aside for payment of expenses on my brothers house which he will lose if they are not paid and then I will be homeless . I am currently living in my brother’s house.) If the business does not have enough profit, I will not be able to share in the losses together with my partner nor will I be able to return any money to him. It would seem that there would be issues in signing such a heter iska.

What if any text would I need to change in it to make it ok to use? Is it permitted for my partner and I to have an arrangement where he pays the business expenses and takes all the losses if the business fails to make enough profit? Do we need to change our agreement and if yes how so? Again, I do not have my own funds available for repayment. Please let me know.

Thank you very much.


The heiter iska is not generally intended for an arrangement such as yours. In your case, you are doing an true iska, and not a heiter iska — meaning, your friend/partner is actually investing in the business, and he isn’t giving you a loan.

There is certainly no problem in his paying th expenses and accepting the losses upon himself. This is actually quite ideal, because it means that he is making a true investment, and taking a chance: If the business goes up, he gains, and if it goes down, he loses.

I am not clear about your arrangement with your partner concerning the capital itself. Are you obligated to pay back the capital irrespective of gains or losses? If not, it follows that there is no loan involved at all, and of course there is no need for any heiter iska.

Even if you are obligated to pay back the capital, and there is a loan, I don’t see a need for a heiter iska, but I cannot say this with certainty without knowing all the details of your contract.

To cover yourselves, you can add a clause stating that all payment are given in accordance with a heiter iska (state which heiter iska is being used), and thereby the stated heiter iska is applied to each payment that is received.

Best wishes and blessings for success.

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