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Paper Topic:

MUSHARAKAH:DEFINITION AND EARLY DEVELOPMENT

Running head : MUSHARAKAH DEFINITION

Musharakah Definition and Early Development

MACROBUTTON NoMacro [Insert Names of Author (s ) here]

MACROBUTTON NoMacro [Insert Institution information here] Musharakah Definition and Early Development

Islam being a way of life ' affects all facets of human existence including economics . Thus , Muslims incorporate Islam in their business principles such as in banking and finance . The Islamic law necessitates that raising and recruitment of financial resources will be free of interest financing instruments and the established financing instruments should involve cost and profit sharing . This practice in the Islamic

br economy emerged from the moral sanctions of the Holy Quran and the Sunnah or the Guidance of Prophet Muhammad ADDIN EN .CITE Choudhury7Choudhury , Masudul AlamIslamic venture capital A critical examinationJournal of Economic StudiesJournal of Economic Studies14-3328 12001 (Choudhury , 2001 . The fundamentals of Muslim economics that are rooted from Islam include the Musharakah . In the non-Islamic economy , Musharakah is known as partnership

In the terminology of Islamic Figh , Shirkah pertains to all the forms of sharing or partnership . In Islamic jurisprudence , Shirkah that literally means sharing is widely used . The Shirkah has two main divisions : Shirkat-ul-milk and Shirkat-ul-`aqd . A specific property being jointly owned by two or more persons is the meaning of Shirkat-ul-milk . The relationship of the people that owned the single property is termed as Shirkat-ul-milk . The Shirkat-ul-`aqd on the other hand , is the second main division of Shirkah that means a mutual contract affects any certain partnership . In the non-Islamic economy Shirkat-ul-`aqd translates as the joint commercial enterprise . The Shirkat-ul-`aqd have further subdivisions : Shirkat-ul-amwal Shirkat-ul-A 'mal , and Shirkat-ul-`aqd / Shirkat-ul-wujooh . The true synonym of Musharakah (partnership ) in the Islamic economy is the shirkat-ul-amwal which is under the scope of Shirkat-ul-`aqd , one of the main divisions of Shirkah . The Shirkah then in a sense has a wider scope than the Musharakah which has a rather limited scope as utilized in the Islamic jurisprudence ADDIN EN .CITE UsmaniUsmani , Maulana TaqiMusharakah Accountancy .com .pkAccountancy .com .pkhttp /www .accountancy .com .pk /docs /islam_m usharakah .pdf (Usmani

The learning on Musharakah today in the non-Islamic economy though exhibits the interchanging property of the Musharakah and the Shirkah meaning the whole concept of sharing and partnership is considered as Musharakah . The term Musharakah was established just recently by scholars studying on the different modes of Islamic financing Musharakah pertains to a specific type of Shirkah , the shirkat-ul-amwal - a kind of partnership between two or more individuals wherein there is a combination of their capital and labor , sharing of profits , and the partners share similar rights and liabilities ADDIN EN .CITE UsmaniUsmani , Maulana TaqiMusharakah Accountancy .com .pkAccountancy .com .pkhttp /www .accountancy .com .pk /docs /islam_m usharakah .pdf (Usmani . Various scholars consider Musharakah as the purest Islamic financial instrument that serve as the proper representation of the Islamic spirit and cooperation ADDIN EN .CITE Beik200620 202047Beik , Irfan Syauqi and Arsyianti , Laily Dwi WHY THE RATE OF FINANCING IN ISLAMIC BANKS IS HIGH ? AN ANALYSIS BASED ON MALAYSIAN CASEInternational Conference on Business Management , and Economics2006Yasar University Turkeyhttp...

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