What are the rulings and conditions of a legitimate Islamic Mudarabah company, and what are illustrative examples of a case where the capital provider contributes with their money and effort, and the Mudarib (worker) contributes with their effort only?
is a type of legitimate partnership. Its most common forms are when capital comes from one party and labor from the other, or when two parties share, one contributing capital and effort, and the other contributing effort only. It is based on two fundamental principles: first, that both the capital provider and the Mudarib (laborer) have an undivided share of the profit according to their agreement; and second, that the Mudarabah capital is not guaranteed, because the capital provider bears the loss of the capital, and the laborer bears the loss of his effort, unless there is negligence or dereliction of duty on the part of the laborer.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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