Book of Partnership (Shirka)

Partnership: It is the joining in an entitlement or in the exercise of authority (tasarruf). It is established by the Quran, the Sunnah, and consensus (ijma). As for the Quran, it is the saying of Allah, the Exalted: "...they are partners in the third" (Quran 4:12). And Allah, the Exalted, says: "And indeed, many associates (khulata') oppress one another, except for those who believe and do righteous deeds—and few are they" (Quran 38:24). The "khulata'" are the partners. From the Sunnah is that which is narrated: Al-Bara' ibn 'Azib and Zayd ibn Arqam were partners. They purchased silver for cash and on credit. This reached the Messenger of Allah (may Allah bless him and grant him peace), and he commanded them: "What was for cash, permit it, and what was on credit, return it."

It is also narrated from the Prophet (may Allah bless him and grant him peace) that he said: "Allah says: I am the third of the two partners as long as one of them does not betray the other; but when one of them betrays the other, I depart from between them." Recorded by Abu Dawud. It is also narrated from the Prophet (may Allah bless him and grant him peace) that he said: "The hand of Allah is over the two partners as long as they do not betray one another."

The Muslims have reached a consensus on the permissibility of partnership in general, though they have differed in some of its types, which we shall explain, if Allah the Exalted wills.

Partnership is of two types: partnership of ownership (shirkat amlak) and partnership of contracts (shirkat 'uqud). This chapter concerns the partnership of contracts. It is of five types: partnership of equivalence ('inan), labor (abdan), credit (wujuh), profit-sharing (mudaraba), and equal liability (mufawada). None of these are valid except from one who has the capacity for legal authority (ja'iz al-tasarruf), because it is a contract regarding the exercise of authority over wealth; thus, it is not valid from one who lacks the capacity for legal authority over wealth, just like a sale.

Section: Ahmad said: A Jew or a Christian may be taken as a partner, but the Jew