When is profit considered established in a Mudarabah such that it becomes the laborer's possession?

General Chapter

Al-Mughni

Book of Partnership

Book 18 · Issue 3 · Bab 1

Open in Qurani

Primary text

The laborer cannot claim any portion of the profit until the capital is fully restored to its owner. If there is a loss (*wadi'ah*) and a profit, the loss must be covered by the profit first, irrespective of whether the loss and profit occurred in a single transaction, separate transactions, or during different journeys. This is because profit is defined as the surplus remaining after the capital is accounted for; anything less than a surplus is not profit. There is no known disagreement on this principle. The apparent position of the madhhab is that the laborer's share of the profit is established upon its materialization, even before formal division.

Supporting text

A reported alternative opinion states that the laborer does not own the profit until it is formally divided. This view is attributed to Malik, and Al-Shafi'i holds two opinions corresponding to these two positions. Those who deny immediate ownership argue that if ownership were established immediately, the laborer would exclusively claim that profit and should then become a partner in the capital itself, similar to partners in a *Shirkah al-'Inan* (a partnership where both parties provide capital).