and the Sunnah: such as the hadiths cited in this chapter.
Scholarly consensus: the jurists have unanimously acknowledged partnership in general.
Analogy: sound analogical reasoning likewise validates it, for it yields great benefit and therefore falls under the established principles of contracts.
- Types of partnership:
Through survey and examination, our early jurists classified contractual partnerships into five kinds:
-
ʿInān partnership: two or more people contribute their capital to a venture and work in it with their own labor, or one of them undertakes the work and receives a larger share of the profit than the other.
-
Muḍārabah partnership: one person hands over a specified amount of capital for another to trade with, in return for an agreed, undivided portion of the profit.
-
Wujooh partnership: two or more individuals purchase merchandise on credit, without having their own capital; whatever profit they make is divided between them according to the share they stipulate.
-
Abdān (labor) partnership: two or more partners pool what they earn through their bodily labor from lawful pursuits, or share in work they jointly assume on their personal liability.
-
Muḍārafah (tafāwuḍ) partnership: each partner authorizes the other to engage, on behalf of them both, in every financial and physical transaction—selling and buying on credit, and in all that may accrue to or be incurred by either of them—without introducing personal earnings or individual liabilities into the partnership.
The muḍārafah partnership resembles what is nowadays called a mixed company.
- Contemporary categories of companies:
With respect to their formation, companies are divided into two groups:
- Partnerships of persons: these are companies in which the personal element is prominent at the moment of formation, in that