Salarzai And Co

 Group

name

Im|Challenger  Group

leader

Maham Tariq  Group

writer

Usman Bashir  Group

Members

Abdul Qader Asghar Ibrahim Umar khan

 Tran

slati on:  While others travel in the land in search of Allah's bounty (Chapter 73, Verse 20)

Introduction of Mudarbah  Origin

of word Mudarbah Taken from the Arabic word ‘Al-Zarb’ which mean traveling

Definition Two are more than two persons enter into a deal in which one party provides capital and the other party conduct the business with this capital under an agreement of receiving a fixed share in the profit.

Ancient form of business practiced by Arabs before Islam Muhammad and Hazrat Hudija also did the Mudaraba business in which Muhammad was the Mudarab and Hazrat Hudija was Rab ul mal

Party in Mudaraba

“Rabal-maal” “Mudarib”   (entrepreneur)

(financer)

Types of Mudaraba  Al-mudarabah

al-muqayyadah (restricted mudarabah): where rabbul-mal specifies a particular business for the mudarib, in which case he shall invest the money in that particular business only.

Al

mudarabah al muttaqah (unrestricted mudarabah): where rabb-ul-mal leaves the door open for the mudarib to undertake whatever business he whishes, the mudarib shall be authorized to invest the money in any business he deems fit.

 One

to one  One to more than one  More than one to one  More than one to more than one

Basic Rules of Mudaraba Two or more persons, of their own free will, should enter into contract whereby one party provides a specified amount of capital to the other who employs this capital in business to make profit.

Basic Rules of Mudaraba The Nature Of the Capital

The capital should be in terms of gold or silver coins or standard money in circulation or commodities

Basic Rules of Mudarabah Distribution of Profit

Share of each party in the profit should be clearly defined in definite ratio or percentage

Sharing of Loss Loss should be solely suffered by the owner of capital, unless such loss is caused by the negligence of the Mudarib.

Management and control The Mudarabah business should be operate and run by the Mudarib

Form of business The Mudarab is absolutely free to trade or do businesses with the capital as he deems fit. Any condition limiting his freedom may render the contract invalid.

Right and duties of Mudarabah  It

is essential for the Mudarib to follow all the rules  Mudarib is free to enter in a contract with other party  Rab ul mal can not take an active part in business with the Mudarib  The Mudarib has no power to lend or gift the capital

Duration of Contract  windup

of contract should be on both willingness  The contract can be made for specified or indefinite period  The contract is terminated by death of one party but…

Application of Mudaraba  To

divert towards Islamic tools of financing because the conventional financial system is greatly inconsistent with Islamic teaching.  Mudaraba in join stock companies