• Financier provides all capital → investment partnership (مضاربة) can be used.
• Both sides provide capital → partnership (مشاركة) can be used.
• Both invest, but one side alone manages → a combination of partnership (مشاركة) and investment partnership (مضاربة) can be used.
Keeping the legal roles clear prevents the arrangement from being treated like a fixed-return loan. Capital, management, ownership and profit entitlement should each follow the role actually undertaken.
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Combining partnership (مشاركة) and investment partnership (مضاربة)
• Financier provides all capital → investment partnership (مضاربة) can be used.
• Both sides provide capital → partnership (مشاركة) can be used.
• Both invest, but one side alone manages → a combination of partnership (مشاركة) and investment partnership (مضاربة) can be used.
Keeping the legal roles clear prevents the arrangement from being treated like a fixed-return loan. Capital, management, ownership and profit entitlement should each follow the role actually undertaken.