Musharakah Case Study

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1.1 MUSHARAKAH Sharing is the literal meaning of Musharakah and it came from an Arabic word ‘Shirkah’ which means being a partner. The term ‘shirk’ is also used in the same context which bring the meaning partner of Allah. Under Islamic jurisprudence, Musharakah is defined as a partnership or enterprise structure with profit or loss which sharing implication that is used in Islamic banking rather than interest bearing loans. Basically, the nature of Musharakah is the allocation of profits must be determined and specified beforehand by a profit and loss sharing partnership. The evidence that shows the nature of Musharakah can be seen in Al-Quran which says “But if they are more than two, they share a third”. It also stated in Al-Quran that “Many partners oppress one another, except those who believe and do righteous deeds, and very few they are” . In hadith it is stated that the Prophet S.A.W said “Allah had said that: “I am the third of…show more content…
The parties agree to merge their assets, efforts and liabilities in the idea of making profits. There are many categories under Sharikat al-Aqd one of that will be sharikat al-Amwal which well known as capital consist of two categories which are sharikat al-Inan and sharikat al-Mufawadhah. Sharikat al-Inan is a limited liability partnership where two or more persons contribute a part of the total capital and participate in work and management. Each partner has its share in profit or loss as stated in the contract. As for sharikat al-Mufawadhah is a contract between two or more persons where each of them contribute a portion of the total capital and participating in work and management. The partners receive their particular profit or loss shares according to equal

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