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    Assignment 5

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    Sheran Hamid
    Mudaraba and musharaka are types of Islamic financing agreements. In mudaraba, one partner provides capital while the other provides labor and expertise to manage the business. Profits are shared but losses are borne solely by the capital provider. Musharaka is an agreement where multiple partners jointly contribute capital, labor, or other assets to a business venture and share profits and losses proportionately based on contributions. The key differences are that in mudaraba the capital provider does not share losses, while in musharaka all partners share profits and losses.

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    Assignment 5

    Uploaded by

    Sheran Hamid
    167 views1 page
    Mudaraba and musharaka are types of Islamic financing agreements. In mudaraba, one partner provides capital while the other provides labor and expertise to manage the business. Profits are shared but losses are borne solely by the capital provider. Musharaka is an agreement where multiple partners jointly contribute capital, labor, or other assets to a business venture and share profits and losses proportionately based on contributions. The key differences are that in mudaraba the capital provider does not share losses, while in musharaka all partners share profits and losses.

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    Mudaraba and musharaka are types of Islamic financing agreements. In mudaraba, one partner provides capital while the other provides labor and expertise to manage the business. Profits are shared but losses are borne solely by the capital provider. Musharaka is an agreement where multiple partners jointly contribute capital, labor, or other assets to a business venture and share profits and losses proportionately based on contributions. The key differences are that in mudaraba the capital provider does not share losses, while in musharaka all partners share profits and losses.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    167 views1 page

    Assignment 5

    Uploaded by

    Sheran Hamid
    Mudaraba and musharaka are types of Islamic financing agreements. In mudaraba, one partner provides capital while the other provides labor and expertise to manage the business. Profits are shared but losses are borne solely by the capital provider. Musharaka is an agreement where multiple partners jointly contribute capital, labor, or other assets to a business venture and share profits and losses proportionately based on contributions. The key differences are that in mudaraba the capital provider does not share losses, while in musharaka all partners share profits and losses.

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    Difference between Musharaka and Mudaraba

    Mudaraba Musharaka

    In mudaraba, it falls on the mudarib to In musharaka, the labor (including


    provide for all labor requirements (the management skills and business
    other partner's contribution is generally expertise) is to be provided jointly by
    confined to providing capital). the parties (partners),
    Entitlement to a share of profit in Entitlement to a share of profit in a
    musharaka is based on the capital mudaraba, on the other hand, hinges on
    contribution of all partners whether in two elements
    the form of cash, goods, tangible 1) The existence of capital (subject
    assets, services or creditworthiness (in to the conditions of musharaka
    case sharika is based on reputation). capital).
    The subject of the musharaka contract 2) The work undertaken by the
    is some form of capital contribution. mudarib (a type of contribution
    that is different from the
    mudaraba capital).

    Mudaraba is a partnership in profit in Musharaka is an agreement between


    which one partner provides capital (rab two or more partners to combine their
    al-mal) and the other provides labor assets, services, obligations or
    and business expertise (mudarib). In liabilities for the purpose of making
    essence, mudaraba is a special case of profit.
    musharaka (or sharika), with each type
    of contract having its distinguishing
    features.
    Losses are faced only by the capital Losses are Shared among all.
    provider.

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