What is the ruling on a combined Mudarabah where one partner provides both capital and labor (as a working partner)?
General Chapter
Al-Mughni
Book of Partnership
Primary text
When two individuals each contribute 1000, and one is authorized to trade with both sums (acting as the working partner in a hybrid Mudarabah/partnership), if the agreed profit share for the working partner exceeds one-half, it is valid. This is because he is acting as a Mudarib concerning his partner's 1000, and a Mudarib can validly stipulate any agreed profit share, without dispute.
Supporting text
If the stipulated share for the working partner is less than half of the profit, the condition is invalid because the profit is derived from both capital and labor, and the portion exceeding the stipulated share has no corresponding counter-value for the capital owner. If the profit is simply divided equally (half and half), it is neither a formal partnership nor Mudarabah, as no consideration is given for the working partner's labor; rather, it becomes a form of permissible loan deposit (Ibdā') unless the capital itself was a loan, in which case it is invalid.