The owner of the shop then says, “I have sold it to you both.” Thus, they become partners in this shop without paying out any cash—neither both of them nor either one of them—for if both had paid cash, it would have been an ʿinān partnership; and if one of them had paid, it would have been a muḍāraba partnership. But these two have paid no capital, because they purchased on the strength of their credit and standing.

Another example: two other men go to the owner of a shop. They are known for their scheming and deception, and they say, “Sell us the shop.” He replies, “Give me the money.” They say, “We have no money, but you have our standing, reputation, and liability.” Yet they are known for trickery, deception, fraud, and delaying payment, so in this case he would not sell to them. In the first example, however, he did sell to them because they possessed standing, reputation, and reliable liability.

It is now clear that a partnership based on creditworthiness means that the two partners have no capital—neither jointly nor individually—but possess liability, standing, and esteem in people’s eyes.

The poor who are capable of earning a livelihood may need this type of partnership. The Prophet ﷺ said concerning charity: “It is not lawful for a wealthy person, nor for one who is strong and able to earn.” (1) People may have no capital, so they go to merchants and say, “Give us your goods so that we may trade with them, and record their price as a debt owed by us.” In this case, ownership belongs to the two partners, while the merchant is entitled only to a fixed price owed as a debt.