Islamic Fiqh > Companies and leases > Mudaraba (capital-management partnership) > The capital owner buys and sells merchandise of the qirad capital
Contents
Updated on 25 September 2026 at 6:57 PM
This part belongs to the full section: All sections of this part.
This continuation of the chapter on mudaraba covers the end of the contract and the rights of the capital owner (rab al-mal). Sixteen leaves of the legal encyclopedia (al-Mawsu'a al-fiqhiyya) are translated here faithfully: the owner's sale of merchandise from the capital, plurality of owners and workers, when the right to profit falls due, withdrawals during the contract, the zakat of the capital, whether the contract is binding or revocable, the death of the parties, and the loss of the capital. The positions of the four schools are reported with their classical references in parentheses.
The Malikis say: it is permitted for the capital owner to buy from the worker a piece of merchandise of the qirad capital if the transaction is sound and without any condition to that effect at the time of the contract, whether he buys for cash or on credit, so long as he does not thereby manage to take a share of the profit before the settlement, by buying from the worker as he buys from people without favoritism.
It is not permitted for the worker of the qirad to buy from the capital owner merchandise for trade, whether before the work or after it, whether little or much; they gave as the reason for the prohibition that it leads to a qirad on goods, because the capital returns to its owner, as if he had handed over goods. The well-known position here is disapproval, so that the qirad is not diverted by a good, since the capital must return to its owner. As for the worker's purchase of a good for himself, not for the trade of the mudaraba, it is permitted (Sharh al-Kabir with al-Dasuqi's gloss, 5/294 and 298; Sharh Mukhtasar Khalil, 6/213 and 216; Al-Taj wal-Iklil, 4/423 and 426; Tahrir al-Mukhtasar, 4/518 and 521).
2. The capital owner sells a piece of merchandise of the qirad capital. The jurists differed: may the owner sell a piece of merchandise of the mudaraba, or is that only permitted with the muDarib's authorization? The Hanafis permitted it with conditions, the Malikis prohibited it.
The Hanafis say: if the owner sells the mudaraba capital for its equal value or more, the sale is valid; if he sells for less, it is not permitted unless the muDarib approves, whether he sells for less in something whose price people do not misjudge or in something whose price they do misjudge; because the owner's permission to sell proceeds from helping the muDarib, and introducing a diminution into it is not help but ruin: he therefore bears neither its little nor its much. On this basis, if the muDaribs are two and one of them sells with the owner's authorization, he may only sell for the equal value or more, unless the other muDarib approves; because neither of the two muDaribs alone controls the contract itself, but only with the owner's authorization, and the owner may not order a disposition that involves prejudice.
If the muDarib bought with the mudaraba money a good, with or without surplus value, and the owner wants to sell it while the muDarib refuses and wants to keep it until a profit is realized, the muDarib is compelled to sell it, unless he prefers to hand it over to the owner; because the owner cannot be prevented from executing his will over his property for a right whose existence and non-existence are uncertain, namely the profit. He is nevertheless told: 'if you want to keep it, return his money to him'; and if there is a profit, he is told: 'pay him the capital and his share of the profit, and the good is handed over to you' (Bada'i' al-Sana'i', 6/100; Mukhtasar Ikhtilaf al-'Ulama', 4/51).
The Malikis say: it is not permitted for the capital owner to sell a piece of the qirad merchandise without the worker's authorization; and if he is prevented in one good, all the more in all of them; because it is the worker who sets the capital in motion and increases it, and he has a right in the hoped-for profit. If the worker therefore authorizes the owner to sell, he has consented to waive his right; and if the owner sells without authorization, the worker may demand its return or approve the sale (Sharh al-Kabir with al-Dasuqi's gloss, 5/298 and 299; Sharh Mukhtasar Khalil, 6/216; Al-Taj wal-Iklil, 4/427; Tahrir al-Mukhtasar, 4/522).
3. The jurists of the four schools agree that the muDarib may conclude a mudaraba for more than one owner: if a person takes money for a mudaraba and then wants to take another mudaraba from someone else, it is permitted, whether the first authorizes him or not, provided no harm results.
Ibn Qudama (may Allah have mercy on him) said: without disagreement (Al-Mughni, 5/30).
If there is harm to the first owner who did not authorize him, such as the second capital being so large that it requires cutting up his time and distracts him from the trade of the first, or the first capital being so large that engaging with the other interrupts some of its dispositions, that is not permitted according to the Malikis and the Hanbalis.
Ibn Qudama said: most of the jurists said it is permitted; because it is a contract by which he does not acquire all of its benefits, so he is not prevented from the mudaraba, as if there were no harm, like the shared employee.
Response: the mudaraba is based on chance and growth; if he does what would prevent it, the first gets nothing, as if the owner wanted to dispose of the thing itself and he departed from it without harm to him.
Accordingly, if he does so and profits, he returns the profit to the partnership of the first and they divide it (Ibn Taymiyya said: he does not return it like his own labor on his own money or the hire of his person; Al-Furu', 4/291): he looks at what he earned in the other mudaraba and pays the first owner his share from it, the muDarib taking his share of the profit and adding it to the profit of the first mudaraba and sharing it with the owner of the first mudaraba; because he earned his share of the profit through the benefit acquired by the first contract, so it is like the profit of the first capital. As for the second owner's share of the profit, it is paid to him; because the muDarib's aggression does not extinguish the second owner's right; and if we returned all of the second's profit to the first partnership, the harm would fall exclusively on the second owner, while the muDarib would suffer nothing; he may even benefit, if the first stipulated the half and the other the third. And the matter must be ruled either by the invalidity of the other mudaraba or by its validity: if it is invalid, all the profit belongs to the owner, with the muDarib receiving the wage of the like; if we rule it valid, the second owner's share must be paid to him by virtue of the contract and by effect of the condition, and the meaning requires that the owner of the first mudaraba deserve nothing from the other; because he only deserves by money or labor, and he has neither in the other mudaraba; the muDarib's transgression consisted only in neglecting work and turning away from the first capital, which obliges no compensation, as if he worked on his own money's business, hired himself out, abandoned trade for play, or applied himself to knowledge. If a compensation were imposed, it would be a fixed estimate that does not vary with his profit in the other.
And if he took a mudaraba from one man and then merchandise from another, or worked with his own money or traded with it, his profit on the merchandise's money belongs to its owner and on his own money to himself (Al-Mughni, 5/30 and 31; see Sharh al-Zarkashi, 2/146; Al-Mubdi', 5/26; Al-Insaf, 5/437; Kashshaf al-Qina', 3/603 and 604; Rawdat al-Talibin, 3/747; no Hanafi source was found stating this explicitly).
The Malikis say: it is not permitted for the qirad owner to take a second qirad from someone other than the capital owner; the prohibition applies if the other distracts him from working on the first qirad; because the owner has acquired the worker's benefit. If he does not distract him from the work, he may take a second and a third qirad; and the implication of the text is the permissibility of taking it from him even if the other distracts him from the first.
Al-Hattab (may Allah have mercy on him) said: it is stated in the 'Mudawwana', in the book of qirad: the worker may take money as a qirad from another man if the first is not so large that the other distracts him from it; he then takes nothing else; if he takes both while he can work on both, he may mix them, with no guarantee, and it may not be stipulated by the first or the other. End of quotation.
If the other distracts him from the first and he takes it, al-Lakhmi says in his 'Tabsira', in the chapter on qirad: the worker may mix the qirad with his money if he is able to trade with both; if he cannot trade with more than the qirad capital, that is not for him: if he does so and trades with the other while idling the first, nothing remains on him for the first, according to the well-known position of the school, except the capital; according to the other view he owes the equivalent of the profit he deprived the owner of. Likewise if he trades with the first and then engages with the other to the point of missing the sale of the first until its price drops: there is disagreement over whether the worker guarantees what the market lost; because he deprived the owner of it, and if it deteriorated because of his inattention, he guarantees it. Likewise if he takes a qirad after a qirad: he is not prevented from the other if he can trade on both; if he can only trade in one of them, he is prevented from trading in the other; if he does, he guarantees what was in the first, whether from a farm, falling markets, or deterioration as mentioned; and if he engages with the first and idles the other, he guarantees the equivalent of the profit he deprived it of, according to one of the two views; and if it perishes, he guarantees it, because he is transgressing in his taking.
This is when the second did not inform him that he holds a qirad for someone else, or informed him without informing him that he is unable to manage both capitals. End of quotation.
Ibn 'Arafa transmitted it and confined himself to it. Al-Lakhmi's text: he may mix it with his money if he is able to trade with both; if he is unable to trade with the surplus, he is prevented from mixing it; if he trades with the other while idling the first, nothing remains for him according to the well-known position; according to the other view he is liable for the equivalent of the profit he deprived the owner of, if he trades with the first and turns to the other to the point of missing the sale of the first until its price drops or it deteriorates; he guarantees its diminution or all of it if it deteriorated, according to the two views.
Taking a qirad after a qirad is permitted if he can trade on both; otherwise he is prevented from the second; if he does, he guarantees its consequences for neglecting the first and letting its price fall or it deteriorate, as mentioned; and if he engages with the first, he guarantees that in the other if that other did not know he holds a qirad for someone else, or knew without knowing his inability to manage the two capitals. End of quotation (Mawahib al-Jalil, 7/350 and 351; Sharh al-Kabir with al-Dasuqi's gloss, 5/298; Sharh Mukhtasar Khalil, 6/216; Tahrir al-Mukhtasar, 4/522; Minah al-Jalil, 7/355).
There is no disagreement among the jurists of the four schools that the capital owner may hand his capital as a mudaraba to more than one person; they differed over their profit: must it be according to their work, or may it be greater for one despite equal work, or equal despite differing work?
The majority of the jurists, Hanafis, Shafi'is and Hanbalis, hold that the two may be equal in work and different in profit, or different in work and equal in profit.
The Hanafis say: if a man hands two men a thousand dirhams as a mudaraba on the condition that what Allah grants from that capital be allocated so that one of them alone has half the profit, the other a sixth of the profit, and the capital owner a third, it is permitted according to their stipulation; because the owner stipulated for each of the two muDaribs a known share of the profit and differentiated them in the condition because of their difference in insight into profitable trade; that is valid.
If two men hand two men a thousand dirhams as a mudaraba on the condition that one of the two muDaribs alone has a third of the profit and the other a sixth, and the remainder belongs to the two owners of the capital: a third for one and two-thirds for the other; then they work and profit: half the profit goes to the two muDaribs according to their stipulation, two-thirds to one and a third to the other; because their entitlement proceeds from the condition, and so it was stipulated for them. The other half is divided between the two owners of the capital in halves, because their entitlement proceeds from consideration of the capital in which they differed; stipulating an increase for one in the remainder, without his having money or labor in his partner's share, is a corrupt condition.
If a thousand dirhams are handed to two men as a mudaraba on the condition that one has a third of the profit and the other a hundred dirhams, the third of the profit goes to the muDarib for whom a third was stipulated, the rest of the profit to the capital owner, and the other muDarib has the wage of the like for his work; because the mudaraba between him and the owner is corrupted by stipulating a named amount of money for him, and what corrupts does not affect the core of the contract between him and the one for whom a third of the profit was stipulated, who therefore earned it by the condition, the contract between them being valid. If they do not work with it and one of them hands over the capital with his partner who works, whichever of the two it is, the answer is the same; because we have shown that one's labor with his partner's authorization is like their joint labor, whether the contract is valid or corrupt for them both; likewise when it is valid for one and corrupt for the other.
The muDarib for whom a hundred dirhams was stipulated has the wage of the like for working on half the money, whether he is the worker or his partner is; because his labor is on his partner's half and his partner's labor is on his half, so it is like his working for himself.
They also said: if money is handed to two men as a mudaraba and they are ordered to work by their own judgment, neither of them may buy and sell without his partner's order; because the owner consented and entrusted the conduct of the work to their joint judgment, and one man's judgment is not like the judgment of two.
In view of this addition, the disposition of one of them alone does not take effect; and the answer is the same for two agents.
If a thousand dirhams are handed to two men as a mudaraba and they work with it and earn a profit, then one of them claims the owner stipulated for them half the profit, the other claims he stipulated a third, and the owner claims he stipulated for them a hundred dirhams of the profit, the owner's word prevails; because the muDarib earns the profit from the owner by the condition, and the two are claiming from him an entitlement to a share of the profit which he denies: his word prevails with his oath. If they produce two witnesses, one testifying to half the profit and the other to a third, then by the analogy of Abu Hanifa's view this testimony is not accepted, because the two witnesses differ in what they attest; the two muDaribs then have the wage of the like for their work, because the owner acknowledged it, and they take it from him as what they claim; the testimony is admitted for the muDarib who claimed half the profit: he has a sixth of the profit, because he claims the more and does not call either of his witnesses a liar; but the testimony is accepted only to the extent the two witnesses agree in meaning, which is a sixth of the profit; and the other has the wage of the like; because he was contradicted by one of his two witnesses, the one who testified for more than he claimed; his testimony being void for him, he has the wage of the like that the owner acknowledged (Al-Mabsut, 22/31, 46 and 186; Ibn 'Abidin, 8/327; Al-Hindiyya, 4/296 and 297).
The Shafi'is say: one owner may contract with two, like Zayd and 'Amr, with differing or equal shares of the stipulated profit. If one contracts with two and stipulates for them half the profit equally, it is permitted; if he stipulates half for one and a quarter for the other: if he is vague, it is not permitted; if he specifies a third for this one and a quarter for that one, it is permitted; because one person's contract with two is like two contracts.
Two owners may also contract with one worker; because that is like a single contract. If they are equal in what is stipulated, that is so; if they differ, it is as if one stipulated the half and the other the quarter: if they are vague, it is not permitted; if they specify, it is permitted if he knows what belongs to each. The profit, after the worker's share, is divided between the two owners according to the money: if one's money is two thousand and the other's a thousand, and half the profit is stipulated for the worker, they divide the other half into thirds according to the ratio of their monies; if they stipulate other than what the ratio requires, the contract is corrupted, because it stipulates profit for one who is neither owner nor worker (Rawdat al-Talibin, 3/746 and 747; Mughni al-Muhtaj, 3/349 and 350; Nihayat al-Muhtaj, 5/263; Al-Najm al-Wahaj, 5/272 and 273; Al-Dibaj, 2/433 and 434).
The Hanbalis say: a man may hand money as a mudaraba to two men, and the two may be equal in profit despite differing work, or differ in profit despite equal work, as in partnership; because labor is a means of deserving profit, so it is permitted for them to differ in profit while both are working; one of them may be more perceptive in trade than the other and stronger in work, so he may stipulate an increase in profit in return for his labor.
As for the mudaraba containing a partnership, it is when the money of two men is combined with the body of one of them, each putting out a thousand and one authorizing the other to trade with both; whatever they stipulate for the worker of profit above the half is permitted; because he is a muDarib for his partner over a thousand, and for the worker of the mudaraba what they agreed, without disagreement; if they stipulate for him less than half the profit, it is not permitted; because profit is earned by money and labor, and the portion above the half stipulated for a non-worker has no counterpart, so its stipulation is void. If they make the profit two halves between them, this is neither partnership nor mudaraba; because the 'inan partnership requires sharing money and labor, and the mudaraba requires that the worker have a share of the profit in return for his labor, and here nothing was made for him in return for his labor; and if they gain, they made the profit according to the two capitals, his labor on his partner's share being a gratuity: that is then an ibda' (placing capital in another's ownership), which is permitted so long as it is not compensation for a loan; if the worker borrowed the thousand or part of it from his partner, it is not permitted; because he made his labor on his partner's money compensation for his loan.
As for when two persons partner with the money of one of them, one putting out a thousand and both working on it: the worker who has no money has of the profit what they agreed; because he is a pure muDarib, like the owner of the money working alongside him.
It follows that the profit between them, on what they agreed, is the same in all forms of partnership, as we said regarding the mudaraba containing a partnership, as explained.
If a man hands two men money as a qirad on the half, and the money is liquidated while it is three thousand, and the capital owner says: 'the capital is two thousand', one of them confirms him and the other says: 'rather it is a thousand', the word of the denier prevails with his oath: if he swears the capital is a thousand and the profit two thousand, his share of them is five hundred; there remain two thousand five hundred: the owner takes two thousand, because the other confirms him; there remain five hundred of profit between the owner and the other worker, which they divide into thirds: two-thirds for the owner, that is 166 dirhams and two-thirds; and a third for this worker, that is 333 dirhams and a third. Because the owner's share of the profit is half of it, and this worker's share is a quarter of it, the remainder of the profit is divided between them into three parts. What the oath-taker took beyond his due is like it perishing between the two; and what perishes is counted, in the mudaraba, from the profit, said Ibn Qudama, and this is al-Shafi'i's view (Al-Mughni, 5/19, 45 and 46; Kashshaf al-Qina', 3/614).
5. The Malikis and Hanbalis state that the owner may hand two capitals together to one worker, who works on each separately, whether at one time or at two times.
The Malikis say: the owner may hand two capitals to one worker who works on each separately, whether they are of the same kind, like a hundred (dirhams) of gold and the like of gold, or of different kinds, like a hundred of gold and a hundred of silver; whether the share is the same, like half the profit of each, or different, like half the profit of one and a third of the other; whether the profit of both is for them both, or the profit of one for one of them alone and the other's for both, or this one's profit for the capital owner and the other's for the worker: all that is permitted if they stipulate mixing the two capitals at the handover, that is, in the contract over them; because it then reduces to one known share, so there is no ambiguity. If they do not stipulate the mixing, it is not permitted when the shares differ, and permitted when the shares are the same; because there is no ambiguity in his working more on one of the two capitals, unlike capitals with differing shares: he might work much on the one with the larger share and neglect the other.
Likewise, one seeking a qirad may hand two successive capitals in two contracts, that is, one after the other, to one worker, provided the other is handed over before the first money is engaged, so that he works on each separately; whether the capitals are the same or different, and the shares the same or different, like half the profit on this one and a third on that, as mentioned. The permissibility, for two capitals together or successive, with same or different shares, requires stipulating the mixing at the handover of the other before the first is engaged; because it then reduces to one known share, with no ambiguity. If they do not stipulate the mixing, it is not permitted with differing shares and permitted with identical shares, as mentioned.
If the second capital is handed over after the first is engaged, without liquidation, it is permitted on condition of no mixing, even with differing shares; because if he loses on one of them he is not obliged to compensate it from the other's profit. If they stipulate mixing after the first is engaged, it is not permitted, whether the shares are the same or different; they explained the reason: he may lose on the other and be obliged to compensate it from the first's profit.
Likewise the capital owner may hand him another money to work on alongside the first after the first's liquidation, that is, the money's becoming dirhams and dinars by selling the goods and receiving their price in dirhams and dinars, on two conditions:
The first: that the first have been liquidated without profit or loss, like buying for a hundred and selling likewise for a hundred; if it is liquidated with profit or loss, it is not permitted: if liquidated with profit, the worker might lose his profit; if with loss, the other qirad might compensate the first's loss.
The second: that their shares match, the profit of the other money for the worker being like the profit of the first, like a third of each one's profit.
If the share stipulated for the worker in the other differs from what was stipulated in the first, it is not permitted. These two conditions were mentioned by Khalil; except that al-Dardir and al-Dasuqi (may Allah have mercy on them) said: the truth is that if the first is liquidated at par, the handover is permitted unconditionally, whether their shares, that is, the profit, match or differ, if they stipulate mixing; otherwise it is prohibited unconditionally, whether the shares match or differ (Sharh al-Kabir with al-Dasuqi's gloss, 5/294 and 295; al-Karashi's Sharh Mukhtasar Khalil, 6/12 and 13; Tahrir al-Mukhtasar, 4/517 and 518; Al-Taj wal-Iklil, 4/422 and 423).
The Hanbalis say: if the owner hands the muDarib two thousand at two times, giving him a thousand as a mudaraba and then another thousand which he does not mix, that is not permitted without the capital owner's authorization; because he separated each with a contract, so they are two contracts, and the loss of one is not compensated by the other's profit, as if he had forbidden it.
If the owner authorizes the muDarib to mix before he disposes of the first money, it is permitted and it becomes a single mudaraba, as if he handed them to him at once; likewise if he authorizes the mixing after his disposal, once the first is liquidated: all the money becomes a single mudaraba, as if handed over in one go.
If he authorizes the mixing after his disposal of the first without its having been liquidated, mixing is not permitted; because the ruling of the first contract is fixed, its profit and loss belonging to it alone, and attaching the other to it leads to compensating one's loss with the other's profit; if that is stipulated in the other, it is corrupted.
If he does not authorize him to attach the other to the first, that is not permitted to him; because he separated each with a contract, so they are two contracts each with its own ruling, the loss of one not being compensated by the other's profit, as if he had forbidden it (Al-Mughni, 5/36; Al-Kafi, 2/278; Al-Mubdi', 5/30; Kashshaf al-Qina', 3/604; Matalib Uli al-Nuha, 3/531).
As for the Hanafis and Shafi'is, I found no view of theirs on this issue.
6. The Hanafis say: murabaha (resale with a disclosed markup) between the capital owner and the muDarib is permitted; it consists of (Bada'i' al-Sana'i', 6/87; Al-Ikhtiyar, 3/23; Sharh al-Kabir, 5/310; Tahrir al-Mukhtasar, 4/532; Ibn al-Hajib's Jami' al-Ummahat, p. 427; Al-Taj wal-Iklil, 4/435; al-Sawi's gloss, 8/428; Al-Qawanin al-Fiqhiyya, p. 280; Al-Muhadhdhab, 1/388; Al-Bayan, 7/219; Al-Mughni, 5/44; Al-Kafi, 2/282; Al-Mubdi', 5/35; Al-Insaf, 5/445; Kashshaf al-Qina', 3/612; Sharh Muntaha al-Iradat, 3/585; Matalib Uli al-Nuha, 3/538).
The muDarib is a trustee without negligence, like the depositary; and because he received it with the owner's permission, once he disposes of it he is its agent; because it is a disposal of another's money by his order (Bada'i' al-Sana'i', 6/87; Al-Ikhtiyar, 3/23; Sharh al-Kabir, 5/310; Tahrir al-Mukhtasar, 4/532; Ibn al-Hajib's Jami' al-Ummahat, p. 427; Al-Taj wal-Iklil, 4/435; al-Sawi's gloss, 8/428; Al-Qawanin al-Fiqhiyya, p. 280; Al-Muhadhdhab, 1/388; Al-Bayan, 7/219; Al-Mughni, 5/44; Al-Kafi, 2/282; Al-Mubdi', 5/35; Al-Insaf, 5/445; Kashshaf al-Qina', 3/612; Sharh Muntaha al-Iradat, 3/585; Matalib Uli al-Nuha, 3/538).
The jurists of the four schools agree that stipulating the guarantee of the capital against the muDarib, should it perish without negligence on the worker's part, is not valid.
They differed over the effect if the condition is made: is the mudaraba voided, or does it stand with a corrupt condition?
The Hanafis and the Hanbalis in the madhhab hold that the contract is valid and the condition void, by analogy with the corrupt condition in sale, based on the narration that the sale is permitted and the condition void, relying on the hadith of Barira; and because it is a condition that does not affect the unknownness of the profit, so it does not corrupt it, like the condition of binding oneself to the mudaraba; it differs from the condition of dirhams, because if the condition is void each one's share of the profit becomes unknown.
The Malikis, the Shafi'is, and Ahmad in one narration hold that the contract is void; because it is a corrupt condition that corrupted the mudaraba, like stipulating for one of the two an extra dirham; and because stipulating the guarantee adds excessive uncertainty (gharar) to the qirad itself and is not part of the sunna of the qirad; if the worker works on it, he has the qirad of the like according to the Malikis and the wage of the like according to the Shafi'is, whether or not profit is realized in the money.
As for the worker voluntarily offering the guarantee, the Malikis differed over the qirad's validity in that case (Bada'i' al-Sana'i', 6/87; Al-Ikhtiyar, 3/23; Mukhtasar Ikhtilaf al-'Ulama', 4/65; Bidayat al-Mujtahid, 2/179; Al-Mudawwana al-Kubra, 12/109; Al-Kafi, p. 385; Sharh al-Kabir with al-Dasuqi's gloss, 5/284; Tahrir al-Mukhtasar, 4/508; Al-Taj wal-Iklil, 4/412; Al-Bayan, 7/231; Rawdat al-Talibin, 3/747; Mughni al-Muhtaj, 3/350; Nihayat al-Muhtaj, 5/264; Al-Najm al-Wahaj, 5/273; Al-Dibaj, 2/434; Al-Mughni, 5/40; Al-Insaf, 5/424; Matalib Uli al-Nuha, 3/521; Al-Ifsah, 1/450).
The origin is that the muDarib is a trustee: he does not guarantee what perishes under his hand of the mudaraba money unless he transgresses or falls short; and if the owner stipulates from the muDarib the guarantee of the mudaraba money, it is not valid.
The Hanafis and Ibn al-Qayyim (may Allah have mercy on him) mentioned more than one stratagem for binding him:
This stratagem is valid among the Hanafis and Hanbalis as mentioned; because they do not require the profit to be according to the two capitals, so the capitals may differ with equal profit and the profit may differ with equal capitals, unlike the Malikis and Shafi'is; because they require the profit and loss to be according to the two capitals, not according to what the two stipulate.
The jurists differed over the muDarib: does he acquire his share of the profit upon its appearance or upon division?
The Shafi'is, against the apparent view, and the Hanbalis in the madhhab hold that the worker acquires his share of the profit upon its mere appearance, before division; because the condition is valid, so its requirement stands, namely that he have a share of the profit; once it exists he must own it by the condition's ruling, like the fruit-taker owning his share of the fruit upon its appearance; and by analogy with every valid condition in a contract; and because this profit is owned property and must have an owner, and the capital owner does not own it by agreement, the rulings of ownership not being established for him, so it must belong to the muDarib; and because he owns the claim to division, he is an owner like one of the two 'inan partners; and it is no obstacle that he owns it while it safeguards the capital, like the capital's share of the profit; and thereby his exclusive appropriation of his profit is prevented; because if the capital owner appropriated his own share's profit, he would deserve from the profit more than what was stipulated for him, and the condition does not establish what contradicts its requirement; and because the worker only acquires the dissolution of the qirad by claiming his right from the profit, and whoever owns the claim to his partner's division of what is between them shows that he owns his share upon appearance, like the money between the two partners.
However, the Hanbalis state that the muDarib does not own taking from the profit except with the capital owner's authorization; because his share is undivided and he does not share with himself; and because his ownership is not settled; and if he stipulates that he only owns it upon division, the condition is not valid, because it contradicts the contract's requirement.
The Shafi'is, on this view, said: the worker's disposition over it is not valid; because it is unsettled, the profit safeguarding the capital. If a loss occurs, it is covered from the profit as far as possible.
If they divided the profit by mutual consent before the contract's dissolution, ownership does not settle; and if a loss occurs afterwards, the worker must compensate it with what he took.
The Hanafis, Malikis, Shafi'is on the apparent view, and Hanbalis in one narration hold that he only owns it upon division; because if the worker owned some of the money before division he would be a partner of the capital owner like the two 'inan partners, to the point that if some of the money perished it would be counted from the two capitals; yet the perished is counted from the profit, showing he owns none of the money; and because the profit safeguards the capital.
And because if the capital were two thousand and he bought with it two slaves each worth two thousand, and the worker freed one, the manumission would not take effect; because he owns none of them; the reason being that the sharing has not occurred, and the profit was not taken into account in this case.
And because if he bought with the money two slaves of equal value and the capital owner freed them both, he would guarantee nothing to the worker.
The Shafi'is said: on this view his right is established until he is inherited from; because even if he does not own it, his right to acquire is established; and he takes precedence over the creditors, because his right is attached to the object; and he may refrain from working after the profit appears and pursue the liquidation, so as to take his right from it; and if the owner destroys the money, he guarantees the worker's share, destruction being like recovery (see al-Shirazi's Al-Tanbih, p. 120; Al-Bayan, 7/214; Rawdat al-Talibin, 3/756 and 757; Mughni al-Muhtaj, 3/354 and 355; Nihayat al-Muhtaj, 5/269; Al-Najm al-Wahaj, 5/278; Al-Dibaj, 2/437; Bada'i' al-Sana'i', 6/107 and 108; Al-Ishraf 'ala Nakt Masa'il al-Khilaf, 3/176, no. 1024; Al-Mughni, 5/33; Sharh al-Zarkashi, 2/147; Al-Mubdi', 5/31; Al-Insaf, 5/445; Sharh Muntaha al-Iradat, 3/580 and 581; Matalib Uli al-Nuha, 3/529).
The Hanafis said: the muDarib only deserves the profit upon division, and the condition for the validity of division is receipt of the capital; so division of the profit before receipt of the capital is not valid; to the point that if a man is handed a thousand dirhams as a mudaraba on the half and earns a thousand, then they divide the profit while the capital is in the muDarib's hand without the owner receiving it, then the thousand in the muDarib's hand perishes after their division of the profit: the first division is invalid; what the owner received is counted against him from his capital; and what the muDarib received is a debt on him which he returns to the owner, until the owner recovers his entire capital; division of the profit is not valid until the owner recovers the capital. The origin of considering this condition is what is related from the Prophet:
The example of the believer is the example of the merchant: his profit is not secured for him until his capital is secured for him; likewise the believer: his voluntary deeds are not secured for him until his obligations are secured for him.Text cited by al-Kasani in Bada'i' al-Sana'i' (6/107); no hadith collection reports it with a chainThe text thus shows that division of the profit before receipt of the capital is not valid; and because the profit is an increase, and an increase over a thing only comes after the original is safe; and because when the money remains in the muDarib's hand the mudaraba's ruling applies to it as it is: if we validated division of the profit, the division of the derivative would be established before the original, which is not permitted. The division being invalid, if what is in the muDarib's hand perishes, what they divided becomes the capital, and the muDarib must return the entire capital from it; if the owner first receives a thousand dirhams of his capital, then they divide the profit, then he returns the thousand he received, in kind, into the muDarib's hand on condition that he work with it on the half, this is a future mudaraba: if it perishes in his hand, the first division is not undone; because when the owner recovered his capital the mudaraba ended and the division became valid; when he returns the money this is another contract, and the money's perishing in it does not void the division in the other.
If the profit in the first mudaraba was two thousand and they divided the profit, the owner taking a thousand and the muDarib a thousand, then what is in the muDarib's hand perishes: the division is void, what the owner received is counted from the capital, and the muDarib returns half the thousand he received; because when the capital in the muDarib's hand perished before the division's validity, what the owner received became his capital; and once that became the capital, the profit is determined in what the muDarib received by division, so they are upon the condition and he must return half of it; likewise if what the muDarib received of the profit also perished, he must return half of it; because it became clear that he took the owner's share of the profit for himself, so it became guaranteed against him.
If what the owner received perishes, nothing is determined by its perishing; because what perishes after receipt perishes within the receiver's guarantee, so its survival and its perishing are the same (Bada'i' al-Sana'i', 6/107 and 108; Al-Mabsut, 22/105; Tabyin al-Haqa'iq, 5/68; Al-'Inaya, 12/167).
The Hanbalis state that if the capital owner and the muDarib agree on dividing the profit, or on dividing part of it, or agree that each of them take each day a known amount, it is permitted; because the right does not exceed them.
Ibn Qudama (may Allah have mercy on him) said: if one of them demands division of the profit without the capital and the other refuses, the word of the one who refuses prevails: if he is the owner, because he cannot rule out loss in the capital which would be compensated from the profit; if he is the worker, because he cannot rule out being obliged to return what he took at a time when he is unable; and if they consent to that, it is permitted, because the right does not exceed them; whether they agree on dividing all of it or part of it, or on each of them taking a known amount to spend; then whenever a loss appears in the money or all of it perishes, the worker must return the lesser of the two: what he took, or half the loss of the money if they divided the profit in halves; and to this said al-Thawri, al-Shafi'i and Ishaq.
Abu Hanifa said: division is not permitted until the capital owner recovers his money. Ibn al-Mundhir said: if they divide the profit without the owner receiving his capital, most people of knowledge say the worker returns the profit until the owner recovers his money.
Our argument for the permissibility of division is that the money belongs to them both, so they may divide part of it like the two partners; or to say: they are partners, so division of the profit before settlement is permitted for them, like the two 'inan partners (Al-Mughni, 5/37; Al-Kafi, 2/279; Kashshaf al-Qina', 3/609).
The Shafi'is also stated the permissibility, but explained and detailed: they said, if the owner takes back part of the qirad money before any profit or loss appears, the capital becomes what remains after what was taken back; because nothing was left in his hand besides it, as if he had from the outset limited himself to handing him that: if it was a hundred and he takes back ten, the capital becomes ninety; because nothing remained in his hand besides it.
If the owner takes back without the worker's consent after the profit has appeared, what is taken back is shared between profit and capital; because there is no distinction, in proportion to the total profit; and the capital does not take on the ruling of the remainder, because the worker's ownership has settled on what is specifically his of the profit according to the condition, so it does not fall away with any loss occurring afterwards.
As for when the taking back is with the worker's consent: if he and the owner intended taking from the original, it is set apart as such; or from the profit, likewise; but the worker owns from what is in his hand the equivalent of that by sharing; if they left it unspecified, it is carried to sharing; and the more likely, as Ibn al-Rif'a said, is that the worker's share become a loan; al-Isnawi transmitted it from him and endorsed it, then said: when the taking back is without his consent, his disposition over his share does not take effect, even if he did not own it upon appearance.
Its example: the capital is a hundred dirhams and the profit twenty of them; the owner takes back twenty of that; the profit in this example is a sixth of all the money; the amount taken back, which is the twenty, has a sixth of it, that is three dirhams and a third, counted from the profit; there then remains established for the worker what was stipulated for him, namely one dirham and two-thirds if half the profit was stipulated for him; and the remainder of the amount taken back, sixteen and two-thirds, is from the capital, which returns to eighty-three and a third. If what is in his hand returns to eighty, what was established for him does not lapse: he takes from it one dirham and two-thirds and returns the remainder, which is seventy-eight dirhams and a third.
If the owner takes back part of it after a loss has appeared, the loss is distributed over what was taken back and the remainder after it; then compensating the share of what was taken back, which is twenty, is not required if the money profits afterwards; because if he returned all of it after the loss, nothing would be required of him; and the capital becomes what remains after what was taken back and its share of the loss.
Its example: the money, that is, the capital, is a hundred, and the loss incurred in it is twenty; then the owner takes back twenty; a quarter of the twenty, which is the whole loss, as the share of what was taken back from it, is five; it is as if he had taken back twenty-five; and the capital thereafter, after what was taken back and its share of the loss, returns to seventy-five; because when we distribute the loss over the eighty, every twenty bears five, and the twenty taken back bears five, leaving what was mentioned; if he profits afterwards, it is divided between them as profit according to what they stipulated (Rawdat al-Talibin, 3/761 and 764; Al-Bayan, 7/197; Mughni al-Muhtaj, 3/357 and 360; Nihayat al-Muhtaj, 5/272 and 276; Al-Najm al-Wahaj, 5/280 and 283; Al-Dibaj, 2/439 and 441).
The jurists differed over who pays the zakat of the mudaraba money and when it is paid, on multiple views, with detail in each school, as follows.
The Hanafis said: the muDarib pays the zakat of his share of the profit when the year completes, if he has the nisab and the profit has appeared; if a slave-girl worth two thousand was bought and the capital is a thousand, he owes zakat on five hundred when the year completes, and the capital owner on two thousand five hundred. The muDarib may demand from the capital owner the division, so as to obtain his share of the profit as distinct property, validly owned, on which zakat is obligatory for him (Mukhtasar Ikhtilaf al-'Ulama', 1/437; Al-Binaya Sharh al-Hidaya, 10/105).
The Malikis said: the qirad is either present in the capital owner's town or absent from it.
1. The qirad present in the capital owner's town, in reality or in ruling, such as the money being in a town other than its owner's while he knows its state: he pays its zakat in management mode; they differed over when he pays it into three views:
2. The qirad absent from its owner's town whose state is unknown: its owner does not pay its zakat even if it has been absent from him for years, until it arrives; unless he orders the worker to pay its zakat during his absence every year, and the zakat is then counted against its owner from the capital; if the worker does not pay it during those years, its owner pays it after its arrival for all the years of absence, beginning with the year of arrival: the zakat due for this last year is computed, then he pays its equivalent for each of the preceding years after deducting what is taken from the money as zakat; this is if the qirad in each of the preceding years was equal to the last year or more; if it was less, he pays according to its amount after deducting what was taken as zakat.
Example of that: one who has twenty-one dinars, the worker absent with them for five years, then finds them after arrival as they were: he then begins with the first year and the one after it and does not pay on the third; because it has fallen below the nisab.
If the qirad's owner, or the worker, or both of them are hoarders, its owner pays its zakat a year after receiving it, even if it remained with the worker for years.
As for livestock, its ruling is that its zakat be accelerated, present or absent, whether the worker hoards it or manages it; and like the livestock is the plough animal; the zakat is counted against the capital owner, and is not compensated from the profit, like the loss.
As for the worker, he pays the zakat of his share of the profit, even if less than the nisab, for one year after receiving it, even if the qirad remained in his hand for years; whether the worker and the qirad's owner are both managing, both hoarding, or differing; and that under five conditions:
If the capital is ten dinars and its owner hands them to the worker on condition of having for himself one part in a hundred of the profit, and the money profits a hundred: its owner does not pay zakat; because the total of the capital and his share of the profit is eleven; likewise the worker does not pay zakat, but begins the year's count on what was allotted to him, which is ninety-nine, from the time of receipt (Ibn Yunus's Al-Jami', 1/105; Sharh al-Kabir with al-Dasuqi's gloss, 2/76 and 79; Al-Dhakhira, 3/28; Sharh Mukhtasar Khalil, 2/199 and 201; al-Sawi's gloss on the Sharh al-Saghir, 2/172 and 175; Al-Bahja fi Sharh al-Tuhfa, 1/578).
The Shafi'is said: if a thousand dirhams are handed to a man as a qirad in halves, and the year completes while it has become two thousand, the question is raised concerning the muDarib: when does he own the profit? There are two views, as mentioned: one, that he owns it by the sharing, and this is the apparent view of the madhhab; on this basis the zakat of the whole is owed by the capital owner; if he pays it from the money itself, from where is it counted? There are three views: one, that it is counted from the profit; because it is among the money's expenses, like the wages of the transporter, the weigher and the measurer; the second, that it is counted from the capital; because the zakat is a debt against him in his liability according to one of the two views; when he discharges it from the money it is counted from the capital like other debts; the third, that it is counted from the capital and the profit together; because the zakat is due in the capital and the profit, so what is paid out is counted from both. Its example: the capital is two hundred and the profit a hundred: two-thirds of the payment is from the capital and a third from the profit. The view against the apparent is that he owns the profit upon its appearance; on this basis the zakat of a thousand five hundred is owed by the capital owner, and paying it is as we said, without disagreement; and the zakat of the worker's share is not required of him, without disagreement. Then if he wants to pay the zakat from the qirad money, from where is it counted? The same three views. That is the owner's ruling. As for the worker on this view, is the zakat of his share of the profit required of him? There are three cases, the soundest of which: the zakat of five hundred is owed by the worker; because he is an owner able to dissolve and share at all times, and to dispose after division of his share; so zakat is required of him, except that paying it is not required of him; because he does not know whether it will come to him or not, so paying its zakat is not required of him, like absent money; if he pays its zakat from other money, it is permitted; if he wants to pay it from the money there are two views: one, that it is not for him and the owner may prevent him; because the profit safeguards the capital, and he might lose, so zakat is not paid from it; the other, that he may do so without the owner's authorization; because the two of them have both come under the rule of Islam and the obligation of zakat.
All of this when the owner and worker are both among those subject to zakat; as for when the owner is subject to it without the worker: if we say the whole belongs to the owner so long as it is not divided, the zakat of the whole is upon him; and if we hold the other view, the zakat of the capital and his share of the profit is upon him; and his share is not completed, if it does not reach the nisab, by the worker's share; because he is not among those subject to zakat, so their mixing is not valid.
As for when the worker is subject to zakat without the owner: if we say it is all the owner's before division, there is no zakat; if we say the worker has his share of the profit, the obligation of zakat upon him carries the previous disagreement; if we make it obligatory, that is when his share reaches the nisab, or he has what completes a nisab, and mixing is not established; and it is not for him to pay the zakat from other money, without disagreement; because the owner did not enter the contract for a zakat to be paid from the money.
The other case is on the view of the usurped and denied property; because he is not presently capable of complete disposal.
The third case is the certainty that no zakat is due on him because of the weakness of his ownership and its lack of settlement, being exposed to loss, resembling in that the contractually freed slave (mukatab).
Al-Nawawi (may Allah have mercy on him) said: it follows that the madhhab is the obligation upon the worker; and there are five views on the start of his year on his share, the soundest of which is the stated one: from the moment of appearance; because it is his property from then. The second: from when the money is established against the owner for zakat; because the profit is only realized thereby. The third: from the moment of sharing; because his ownership only settles from then; and this is an error, though famous; because its upshot is that the worker has no zakat on his share; because after the sharing he is no longer a worker but an owner with settled, fully disposable ownership; and the reasoning presupposes that he acquires upon appearance: saying his year only begins at the sharing amounts to saying he has no zakat before division. The fourth view: his year is the capital's year; and this too is plainly an error; because then he is not an owner: how could he base his ownership and year on another's year, when there is no disagreement that a person's year is not based on another's, except the heir on a weak view, because he stands in the place of the deceased. The fifth: from when the worker bought the commodity; and this is an error.
Al-Nawawi said: our companions said: then, when the worker's year completes and his share does not reach the nisab but, with the whole of the money, does reach the nisab: if we affirm mixing in the two monies, zakat is upon him, otherwise not; unless he has of its kind what completes the nisab; and that is if we do not say the year begins from the sharing; for if we make it so, the consideration of mixing lapses.
Our companions said: when we make zakat obligatory upon the worker, paying it is not required of him before division; and this is the madhhab, on which the author, the other Iraqis and the majority ruled; when they divide, he pays for what has passed; there is a view that payment is required of him immediately, because of his ability to divide; the sound view is the first; because the money is neither in his hand nor at his disposal, so he would not be more bound than absent money whose safety is hoped for and whose loss is feared (Al-Majmu', 6/60; Al-Muhadhdhab, 1/161).
The Hanbalis said: there is no zakat on a muDarib's share of profit before division, even if we say he acquires his share upon appearance, because of its lack of settlement; because the profit safeguards the capital, so his ownership is incomplete; and the capital owner pays the zakat of his share of the profit expressly, like the principal, in succession; because he acquires the profit upon its appearance and it follows his money; and the zakat of the muDarib's share of the profit is not owed by the capital owner; because he is not its owner. If a free Muslim man hands a man a thousand as a mudaraba in halves and the year completes while the money has profited two thousand, the zakat of two thousand is owed by the capital owner: the capital and his share of the profit; when he pays it, if he pays the mudaraba money's zakat from money other than the mudaraba money, the capital remains intact; because nothing diminishing it has occurred; if he pays its zakat from it, his zakat is counted from the money's principal; and whoever estimates the owner's share of the profit deducts a quarter of a tenth of the capital along with a quarter of a tenth of the owner's share of the profit, all of it being counted neither from the capital alone nor from the profit alone: it comes to twenty-five, and the capital becomes nine hundred and seventy-five.
It is not for the worker to pay a zakat binding the capital owner without his authorization; otherwise he guarantees it; because he is neither its guardian nor its agent. The condition by each of them, that is, the capital owner and the worker, to pay the zakat of his share of the profit upon the other is valid; because it is like his stipulating for himself half the profit or an eighth, for example. Stipulating the payment of the capital's zakat, or part of it, from the profit is not valid; because it may demean the profit, like the condition of known dirhams (Kashshaf al-Qina', 2/197 and 198; Sharh Muntaha al-Iradat, 2/178; Matalib Uli al-Nuha, 2/19 and 20).