PILLARS AND CONDITIONS OF MUSHARAKAH

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PILLARS AND CONDITIONS OF MUSHARAKAH by Mind Map: PILLARS AND CONDITIONS OF MUSHARAKAH

1. CAPITAL (RA'SUL MAL)

1.1. The capital must be cash or things that can be valued by money.

1.2. The capital must be pooled together without distinguishing the ownership of the capital between the shareholdes.

1.3. The amount of share are not determined to be the same.

1.4. The shareholders can transfer their share to other person.

1.5. The contract of al- Musharakah can be terminated to become a contract of ownership.

2. SHAREHOLDERS (SHURAKA')

2.1. The shareholders or partners must be a qualified person to appoint an agent and to be appointed as an agent under the principle of al-Wakalah.

2.2. Each shareholder is considered as a joint owner of the company and has a right to run the business for him and other shareholders when appointed as an agent.

2.3. Al- Musharakah i.e. partnership and company based business can be made between individuals or organizations.

3. PROJECT OR BUSINESS VENTURE (MASHRU')

3.1. The project must be lawful according to Islamic Law (halal).

3.2. The work carried out by the shareholders for the company shall be evaluated separately and may be mixed during the profit distribution.

3.3. A shareholder can delegate the task of carrying out a company project to his partner and it can be considered as a specified term or condition of the contract.

3.4. The appointed shareholder who carried out the project is held responsible under the principle of Yad Amanah (trust). In the case of his negligence, he is held responsible for compensation under the principle of Yad Dhamanah (guarantee).

4. PRE-DETERMINED PROFIT ALLOCATION (RIBH)

4.1. The profit distribution rate should be determined during the contract-making.

4.2. The profit distribution must be at the agreed rate in the form of profit percentage during the contract-making.

4.3. Loss sharing, except in the case of deceit or negligence, is according to the percentage of shareholding.

5. CONTRACT (SIGHAH) -IJAB (OFFER) -QABUL (ACCEPTANCE)

5.1. Using language that all shareholders can understand.

5.2. Agreed upon all shareholders.

5.3. Conducted in one ceremony.