Musharakah, Mudarabah : Mudarabah partnership

Fatawa Question

Assalaamu Alaykum WRB Sh. Monzer; I pray that all is fine and well with you and the family, InSha’Allah. I had a question in regards Mudarabah partnership : If the Rabb-Ul-Mal is interested in partnering in an existing operation / business. However, the business being invested in uses interest-based borrowed capital. Although the business is Halal. Is such a Mudarabah partnership feasible, Islamically ? Aside from Mudarabah conditions around profits and losses, are there conditions around how much borrowed capital is permitted ? I.e. how leveraged the business is / can be ? Cut-offs etc. As well, the first thought that comes to my mind is that how different is such a partnership from investing in a company on a stock-exchange. Your thoughts on this would be greatly appreciated. Jazaka Allah Khayr Ya Shaykh. Was-Salaam.

Fatwa

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Publication Date

2011-04-15

Main Subjects

Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Investments
• Speculation
• Partnerships

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-734554

• APA
• MLA
• AMA