Written by: Fatwa Saudi Fatwa Committee
The meaning of partnership in Mudarabah is that a person contributes capital, while another person is responsible for managing the business. In return for their efforts, the agent is given a predetermined share of the profits (such as one-fourth, etc.).
If no specific share of the profits is assigned to the agent, they will only receive a wage equivalent to the value of their work, and all the profits will belong to the capital provider.
[Permanent Committee for Islamic Research and Ifta, Fatwa 7337]
Partnership in Mudarabah
In Mudarabah, one partner provides the capital while the other partner only contributes to the business effort, without investing any capital. The profits generated from the business are shared according to the agreed-upon ratio between the two partners. However, in the event of a loss, the loss is borne by the capital provider, while the agent's (the worker's) effort is wasted.The meaning of partnership in Mudarabah is that a person contributes capital, while another person is responsible for managing the business. In return for their efforts, the agent is given a predetermined share of the profits (such as one-fourth, etc.).
If no specific share of the profits is assigned to the agent, they will only receive a wage equivalent to the value of their work, and all the profits will belong to the capital provider.
[Permanent Committee for Islamic Research and Ifta, Fatwa 7337]