Sharikah Musharakah and Modern Corporations - Appendix C (Definitions)

Transcription

1. Shari ’ah Standard No. (12): Sharikah (Musharakah), and Modern Corporations Appendix (C) Definitions Contract Partnership (Sharikat al-’Aqd) Contract partnership is an agreement between two or more parties to combine their assets or to merge their services or obligations and liabilities with the aim of making profit. Partnership of Ownership (Sharikat al-Milk) Partnership of ownership (Sharikat al-Milk) is the combination of the assets of two or more persons in a manner that creates a state of sharing the realised profit or income or benefiting from an increase in the value of the partnership assets. This combination of assets for making profit necessitates bearing losses, if any. The ownership partnership is created by events beyond the partners’ control such as the inheritance rights of heirs in the legacy of a deceased person. This partnership is also created by the wish of the partners such as when two or more parties acquire common shares in a particular asset. Mufawadah Partnership Mufawadah partnership is any partnership in which the parties are equal in all respects, such as funds contributed by them, their right to act and their liability, from the commencement of the partnership to the date of its termination. Sharecropping Partnership (Muzara’ah) Sharecropping is partnership in crops in which one party presents land to another for cultivation and maintenance in consideration for a common defined share in the crop. Irrigating Partnership (Musaqat) Irrigating partnership is a partnership that depends on one party presenting designated plants/trees that produce edible fruits to another in order to work on their irrigation in consideration for a common defined share in the fruits. 363
2. Shari ’ah Standard No. (12): Sharikah (Musharakah), and Modern Corporations Agricultural Partnership (Mugharasah) Agricultural partnership is a partnership in which one party presents a treeless piece of land to another to plant trees on it on the condition that they share the trees and fruits in accordance with a defined percentage. Distribution of Proceeds and Profits Distribution of proceeds and profits is a process of termination an undivided ownership in the company by the final distribution of the assets whereby rights of each partner are defined and common shares are partitioned into identified sets for each partner. This is why distribution is defined as identification of undefined shares or proceeds of a particular person. 364