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Monday, 30 May 2011

Discuss the Various Forms of Business Partnership under Islamic Law

FORMS OF BUSINESS PARTNERSHIP UNDER ISLAMIC LAW :-
There are four kinds of partnership in Islamic Law :

1. SHIRKAT-AL-ANAN :-
In this partnership partners contribute their share in cash. Contribution of capital is also not equal. The profit or loss is also divided on the basis of Capital amount. The liability of each partner is limited to his invested capital. This type of partnership can be formed between any two parties (Women, Children, Muslims, Non Muslims). Generally one partner provides the major source of finance. A partner has no right to lend any thing out of joint assets of the firm.

2. SHIRKAT-AL-MUFAVADHA :-
In this partnership, each partner provides equal capital. Each partner has equal share in the profit and loss. Each partner is helper and agent of the other partner. All the partners have an equal status. There is a written agreement . It can not be formed between the slave persons.

Rights and Duties :- In this partnership each partner has the right to negotiate or do any business contract on the behalf of the other partners.

3. SHIRKAT-AL-SANAI or SHIRKAT-AL-TAQQABAL :-
It is an associate of different skills involved in business. Skilled persons like manager, accountants and labourers provide their skill. While capitalists provide their capital. All these people join together to start the business. The profit is distributed among them according to terms of agreement.

4. SHIRKAT-AL-WAJOOH :-
This type of partnership is formed by agreement for the object of purchasing goods on credit in order to supply them in the market. One partner is an agent of another partner. The profit and loss is distributed equally. In this partnership no partner contributes any amount of capital in business.

Termination of Partnership :- A partnership cab be terminated as under :

1. Notice :- In all the above four forms a partner can terminate the contract by giving the notice to other partners.

2. Death :- Partnership is also terminated on the death of a partner.

1 comments:

fawad iqbal 23 November 2012 03:13  

sir if u gave an example with that four kind it will be more vise and clear
thank you

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