Are bad debts deducted from the Mudaraba company's profits, or are they borne by the Mudarib partner in the event of default?

Scholars differ on the permissibility for the mudarib (investing agent) to sell on credit (nasi'ah):

The majority of scholars: The mudarib is not permitted to sell on credit unless explicitly authorized by the rabb al-mal (capital provider). If he does so, he guarantees the capital. Abu Hanifa and Ahmad (in one narration): Selling on credit is permissible by virtue of the unrestricted contract, because an unrestricted contract encompasses all customary commercial methods used by merchants to generate profit.

Detailed Explanation of the Schools of Thought:

Malik, Al-Shafi'i, and Ibn Abi Layla: The mudarib is not permitted to sell on credit without explicit authorization, because he acts as an agent in the sale and must exercise caution. Selling on credit involves a risk to the capital. Abu Hanifa and Ibn Aqil: Selling on credit is permissible because the authorization for trade and mudarabah extends to customary trade practices. The profit from credit sales may be higher, and it differs from an absolute agency where the aim is to collect the price immediately.

In the case of unrestricted mudarabah (where the mudarib is given full discretion):

The majority of scholars (including Ibn Qudamah): The mudarib is permitted to sell on credit, as this falls within the general scope of the wording and indicates the rabb al-mal's consent to the mudarib's discretion. The Shafi'is: Selling on credit is not permissible, even if authorized, because it involves gharar (uncertainty/risk).

The Mudarib's Guarantee of Debts:

If the rabb al-mal authorizes or approves credit sales, the mudarib does not guarantee the debts unless he has been negligent, such as by delaying debt collection or selling to someone known for procrastination. If the rabb al-mal does not authorize credit sales, the mudarib guarantees these debts according to the majority of scholars. However, they differ on what is guaranteed: whether it is the value of the sold item or its price.