Common management of investment capital from different investors in Mudarabah: scope of validity and consequences in Islamic law

Elements of both mudārabah (fund management) as well as shirkah (partnership) in Islamic law are reflected in the operation of investment accounts offered by Islamic financial institutions. A number of partners pooling their funds together for running a business operation is possible under shirkah....

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Main Author:	Sadique, Muhammad Abdurrahman
Format:	Article
Language:	English
Published:	Zesdyzar Rokman Resources 2013
Subjects:	HG1501 Banking HG4001 Financial management. Business finance. Corporation finance. KBP490 Furūʻ al-fiqh. Substantive law. Branches of law. KBP639 Muʻāmalāt
Online Access:	http://irep.iium.edu.my/34064/ http://irep.iium.edu.my/34064/ http://irep.iium.edu.my/34064/1/COMMON-MANAGEMENT-OF-INVESTMENT-CAPITAL-FROM-DIFFERENT-INVESTORS-IN-MUDARABAH-IJBEL-DEC-2013.pdf

id	iium-34064
recordtype	eprints
spelling	iium-340642015-04-27T00:35:11Z http://irep.iium.edu.my/34064/ Common management of investment capital from different investors in Mudarabah: scope of validity and consequences in Islamic law Sadique, Muhammad Abdurrahman HG1501 Banking HG4001 Financial management. Business finance. Corporation finance. KBP490 Furūʻ al-fiqh. Substantive law. Branches of law. KBP639 Muʻāmalāt Elements of both mudārabah (fund management) as well as shirkah (partnership) in Islamic law are reflected in the operation of investment accounts offered by Islamic financial institutions. A number of partners pooling their funds together for running a business operation is possible under shirkah. Similarly, mixing mudārabah capital with funds of the mudārib (entrepreneur/fund manager) could be valid according to the majority of schools with express permission from the investor. In mudārabah, the schools of Islamic law have recognized the validity of several parties jointly investing funds with a common mudārib through a single contract. Such investment should take place jointly on a single occasion, so that the tenure of mudārabah could commence with regard to all capitals at the same time. Where the mudārib accepts investments from different individuals through individual contracts, the majority of schools require that the business of each capital be managed separately. This restriction is due to fundamental anomalies that may result from mixing different capitals, which, having mobilized in business separately, could be at different stages of profit or loss. However, jurists of the Hanafi school appear to have allowed the mudārib to mix funds of different investors together with their permission. This could possibly indicate permissibility of mixing funds invested at different stages when overall permission had been obtained. The procedure adopted in this regard in the investment accounts run by Islamic banks requires further research and scrutiny. Zesdyzar Rokman Resources 2013-12 Article PeerReviewed application/pdf en http://irep.iium.edu.my/34064/1/COMMON-MANAGEMENT-OF-INVESTMENT-CAPITAL-FROM-DIFFERENT-INVESTORS-IN-MUDARABAH-IJBEL-DEC-2013.pdf Sadique, Muhammad Abdurrahman (2013) Common management of investment capital from different investors in Mudarabah: scope of validity and consequences in Islamic law. International Journal of Business, Economics and Law, 3 (3). pp. 38-45. ISSN 2289-1552 http://ijbel.com/current-issues-2/december-2013/vol-3-issue-3-december-2013-law/
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking HG4001 Financial management. Business finance. Corporation finance. KBP490 Furūʻ al-fiqh. Substantive law. Branches of law. KBP639 Muʻāmalāt
spellingShingle	HG1501 Banking HG4001 Financial management. Business finance. Corporation finance. KBP490 Furūʻ al-fiqh. Substantive law. Branches of law. KBP639 Muʻāmalāt Sadique, Muhammad Abdurrahman Common management of investment capital from different investors in Mudarabah: scope of validity and consequences in Islamic law
description	Elements of both mudārabah (fund management) as well as shirkah (partnership) in Islamic law are reflected in the operation of investment accounts offered by Islamic financial institutions. A number of partners pooling their funds together for running a business operation is possible under shirkah. Similarly, mixing mudārabah capital with funds of the mudārib (entrepreneur/fund manager) could be valid according to the majority of schools with express permission from the investor. In mudārabah, the schools of Islamic law have recognized the validity of several parties jointly investing funds with a common mudārib through a single contract. Such investment should take place jointly on a single occasion, so that the tenure of mudārabah could commence with regard to all capitals at the same time. Where the mudārib accepts investments from different individuals through individual contracts, the majority of schools require that the business of each capital be managed separately. This restriction is due to fundamental anomalies that may result from mixing different capitals, which, having mobilized in business separately, could be at different stages of profit or loss. However, jurists of the Hanafi school appear to have allowed the mudārib to mix funds of different investors together with their permission. This could possibly indicate permissibility of mixing funds invested at different stages when overall permission had been obtained. The procedure adopted in this regard in the investment accounts run by Islamic banks requires further research and scrutiny.
format	Article
author	Sadique, Muhammad Abdurrahman
author_facet	Sadique, Muhammad Abdurrahman
author_sort	Sadique, Muhammad Abdurrahman
title	Common management of investment capital from different investors in Mudarabah: scope of validity and consequences in Islamic law
title_short	Common management of investment capital from different investors in Mudarabah: scope of validity and consequences in Islamic law
title_full	Common management of investment capital from different investors in Mudarabah: scope of validity and consequences in Islamic law
title_fullStr	Common management of investment capital from different investors in Mudarabah: scope of validity and consequences in Islamic law
title_full_unstemmed	Common management of investment capital from different investors in Mudarabah: scope of validity and consequences in Islamic law
title_sort	common management of investment capital from different investors in mudarabah: scope of validity and consequences in islamic law
publisher	Zesdyzar Rokman Resources
publishDate	2013
url	http://irep.iium.edu.my/34064/ http://irep.iium.edu.my/34064/ http://irep.iium.edu.my/34064/1/COMMON-MANAGEMENT-OF-INVESTMENT-CAPITAL-FROM-DIFFERENT-INVESTORS-IN-MUDARABAH-IJBEL-DEC-2013.pdf
first_indexed	2023-09-18T20:49:10Z
last_indexed	2023-09-18T20:49:10Z
_version_	1777409877717549056

Common management of investment capital from different investors in Mudarabah: scope of validity and consequences in Islamic law

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