Musharakah in profit loss sharing

 MUSHARAKAH

 ( Profit sharing)
all the partners have to mutually agree on the ratio of profit distribution.
 Nevertheless, the jurist have differences of opinion on the issue of whether the ratio of profit should be equal with the ratio of capital contributed by each of the partner.

i) Imam Malik and Imam Shafie

The opinion that the ratio of profit must be in conformity with the ratio of capital in order for the
partnership to be valid.

ii) Imam Ahmad bin Hanbal

Conversely, the ratio of profit may differ from the ratio of capital on a condition that all the partners must give their consent to the same.

iii) Imam Abu Hanifah

 Uniquely, he had taken a middle approach. He had resolved that under normal circumstances, the ratio may differ. But, if one partner choose to remain as a sleeping partner, he could only claim for his share of profit  not exceeding his ratio of capital contribution. He further argued that the profit generated  from the musharakah is a result of capital and also work. So, if the partner works he can be entitled to receives portion of profit from his capital and additional profit arises from his work. That why he is entitled to received more. If the partner did not work, he cannot receive a ratio of profit higher than his ratio of capital because he did not work for the musharakah.


(Loss Sharing)
All Muslim jurists had unanimously arrived to a consensus that the loss incurred from the partnership shall be based on the ratio of capital contribution.
  Accordingly, it is not permissible for any preferential treatment given to any of the partners in order to absorb the said loss. However, if the loss incurred is due to managing partner's negligence, he shall be held liable to bear the loss. Hence, according to a vast majority of scholars, any arrangement that leads to only one party to absorb the losses is not allowed , even by way of upfront tanazul.

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