MAHYUDDIN KHALID [email protected]
FIQH MUAMALAHISLAMIC BUSINESS TRANSACTION
CHAPTER FIFTEEN
MUDHARABAH
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
2
DEFINITION EVIDENCE PILLARS OF MUDHARABAH CATEGORIES OF MUDHARABAH CONDITION OF MUDHARABAH DIFFERENCES BETWEEN MUDHARABAH & MUSHARAKAH
CONTENT
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
3
Literally: Increase or profit
Technically: Mudharabah is a contract or a partnership
where one provides the capital and the other the entrepreneurship with the profit being shared among them with a predetermined condition
DEFINITION
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
4
The term mudharabah is derived from the expression making or performing a journey (Ad-dharb fil ardh) and it is called this because the agent (entrepreneur) gets profit by virtue of his hard work and efforts in performing long journeys.
The term Mudharabah was widely known in the classical literature as Qiradh.
Imam Nawawi says: A joint-stock company is called Qiradh or Mudharabah
It exists between two persons, one of whom supplies fund to the other to trade with, on condition that the former has a share in the profit.
NATURE OF MUDHARABAH
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
5
1. The profit will be shared between the two parties according to the terms of their agreement
2. The losses will be borne by the capital provider alone who is the financier.
3. The entrepreneur only suffers the frustration of a fruitless effort.
CHARACTERISTIC OF MUDHARABAH
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
6
Al-Quran:
These general verses indicate the legality of working and venturing on property using Mudharabah.
EVIDENCE
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
7
Hadith: Reported By Hakim Bin Hizam that he had stipulated
to a man that if he gave him certain asset to be utilized for Muqaradah (Mudharabah, Qiradh) , he must not use it to purchase livestock, or carries it (travel) through the sea, or drop by at the oasis, if the man committed any of the above, he is considered to be the guarantor of my property
EVIDENCE
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
8
1. Sahibul Mal Owner of capital, fund provider
2. Mudharib Entrepreneur
3. Ra’sul Mal Capital
4. Al-Amal or Mashru’ Business Venture or projects
5. Ribh Predetermined share of profit
6. Sighah Ijab (Offer) Qabul (Acceptance)
PILLARS OF MUDHARABAH
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
9
FLOWS OF MUDHARABAH
Ra’sul-Mal (Capital) Mashru’
(Project)
Mudharib (Entrepreneur
)
Sahibul Mal (Owner of Capital)
Ribh (Predetermined
profit rate)
profit
profit
Ijab & Qabul
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
10
1. Mudharabah Mutlaqah
Unlimited Mudharabah
The capital provider authorizes the entrepreneur to act completely at the latter’s discretion in all business matter
The entrepreneur may buy and/or sell all types of merchandise as he sees fit, hire helpers as needed, rent equipment and travel with the equipment etc.
2. Mudharabah Muqayyadah
Limited Mudharabah
The capital provider makes certain limitations to the activities to be conducted by the mudharib with regards to the capital given
The limit may be in the form of territorial limits, or time limitation
Also limitation in terms of kind of goods or person with whom trade may be conducted
CATEGORIES OF MUDHARABAH
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
11
Conditions of Work1. The work or business venture under Mudharabah
must be conducted solely by the entrepreneur (mudharib). It is not legal if the capital provider (rabbulmal) was also required to conduct the daily operation.
2. The project must be legal and permissible(halal) 3. All the expenses will be taken from the capital
provided that is not more than the justified expenses required in the venture
CONDITION OF MUDHARABAH
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
12
Conditions of Capital1. Must be in the form of money and not commodities
since commodities fluctuate in price and cause uncertainty and ignorance
2. The capital must be clearly specified, determined and known at the time of the contract
CONDITION OF MUDHARABAH
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
13
Conditions Of Profit1. The distribution of profit must be determined
proportionally between the capital provider and the entrepreneur
2. The pre-determined profit must be in ratio form or percentage and not in fixed amount
CONDITION OF MUDHARABAH
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
14
MUDHARABAH MUSHARAKAH
The capital is financed by one party, which is the capital provider or the owner of the business
The capital is financed by all the shareholders according to the proportion agreed upon by all parties
The capital must be in the form of cash money
Any type of property that could normally be assessed and have certain commercial value could be considered as an acceptable source of capital. Example; intellectual capital
The entrepreneur will be the only one that will conduct the actual business. The capital provider is not allowed to jointly work with the entrepreneur.
All the shareholders have the right to work and contribute their skills, knowledge, experienc e and expertise in the company
The monetary loss will be solely borne by the capital provider while the entrepreneur will only suffer from a fruitless effort without having to bear all the capital losses
The monetary loss will be jointly borne by all the shareholders according to the ratio and proportion of their respective share in the partnership
DIFFERENCE BETWEEN MUDHARABAH AND MUSHARAKAH
DEFINITION
EVIDENCE
CATEGORIES
CONDITIONS
COMPARISON
15
END OF CHAPTER
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