The trade arrangement is based on al-Mushârakah [the Islamic idea of partnership], al-Mudârabah [use of capital on behalf of owners], al-Wakâlah [agency], etc. Al-Mushâraakah implies that almost everybody in the business makes a well-defined financial commitment upon which there will be share in the profit and loss by all, at the stated period of time and according to the financial contribution of
each investor. Al-Mudârabah implies that some people, viz-a-viz the management and those under their employment, manage the joint wealth on behalf of all which means they are entitled to a well-defined emolument or as may be otherwise stated and which does not affect their rights as investors. Al-wakâlah is however based on the duties the company may assign any member of the management team or those under their employ.
