• The managing partner (مضارب) may perform acts normally done in that type of business.
• Routine buying, selling and related activity fall within his authority.
• An extraordinary act outside normal trade practice needs express permission from capital provider (رب المال).
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.
Opening interactive controls...
investment partnership (مضاربة): Business, Profit and Termination
• The managing partner (مضارب) may perform acts normally done in that type of business.
• Routine buying, selling and related activity fall within his authority.
• An extraordinary act outside normal trade practice needs express permission from capital provider (رب المال).
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.