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Session 13 Mudarbah - MUDARABAH Definition This is a kind...

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MUDARABAH  
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Definition   This is a kind of partnership where one partner  gives money to another for investing in a  commercial enterprise. The investment comes from the first partner who  is called  “Rabb-ul-Maal” ( Investor)    while the  management and work is an exclusive  responsibility of the other, who is called  “Mudarib” ( Working Partner)    and the profits  generated are shared in a predetermined ratio.  
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Types of  Mudarabah   1. Al Mudarabah Al Muqayyadah (Restricted Mudarabah) 1. Al Mudarabah Al Mutlaqah (Unrestricted Mudarabah)
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Al Mudarabah Al Muqayyadah (Restricted Mudarabah) Rabb-ul-Maal  may  specify  particular  business  or  a  particular  place  for  the  mudarib , in which case he shall invest the  money in that particular business or place.   This  is  called  Al  Mudarabah  Al  Muqayyadah   (restricted  Mudarabah ).
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Al Mudarabah Al Mutlaqah     (Unrestricted Mudarabah)    Rabb-ul-maal  gives full freedom to  Mudarib  to  undertake whatever business he deems fit, this is  called  Al Mudarabah Al Mutlaqah  (unrestricted  Mudarabah )     However, he is not authorized to:     a) keep another  Mudarib  or a partner b)  mix  his  own  investment  in  that  particular  Mudarabah without the consent of  Rabb-ul Maal .
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Authority of Rabb-ul-Maal Rabb-ul-Maal has authority to:  a) Oversee the  Mudarib’s  activities and   b)  Work  with  Mudarib  if  the  Mudarib        consents.
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