Management of Musharakah

The normal principle of musharakah is that every partner has a right to take part in its management and to work for it. However, the partners may agree upon a condition that the management shall be carried out by one of them, and no other partner shall work for the musharakah. But in this case the sleeping partner shall be entitled to the profit only to the extent of his investment, and the ratio of profit allocated to him should not exceed the ratio of his investment, as discussed earlier.


Create Your FREE Account…

IslamicBanker helps professionals navigate Islamic markets by providing powerful insights, analytics and collaboration tools.


However, if all the partners agree to work for the joint venture, each one of them shall be treated as the agent of the other in all the matters of the business and any work done by one of them in the normal course of business shall be deemed to be authorized by all the partners.

Source: Mufti Muhammad Taqi Usmani, An Introduction to Islamic Finance. Republished with permission.