Is the Mudarib permitted to engage in a partnership (*Musharakah*) using the Mudarabah capital?

General Chapter

Al-Mughni

Book of Partnership

Book 18 · Issue 2 · Bab 1

Open in Qurani

Primary text

The Mudarib is not permitted to enter into a partnership using the Mudarabah capital unless the capital provider explicitly grants them permission to act according to their own judgment, which then validates the action.

Supporting text

Al-Shafi'i holds that allowing the Mudarib to act according to their own judgment is impermissible, and if they do so, they are liable for loss, as this action is considered outside the scope of established trade practices (*tijarah*).