Shariah Parameters of Musharkah Contract and Their Applications: An Analysis with Respect to Prevailing Practices

Abstract

This research paper explores the concept of Shirkat (partnership) in Islam, emphasizing its significance and relevance in contemporary business practices. It highlights the establishment of partnership through evidence from the Quran, Hadith, consensus of Muslim scholars (ijma), and analogical reasoning (qiyas). The article reflects on the popularity of partnership businesses during the era of Prophet Muhammad (peace be upon him) and how he upheld and retained this practice. The essence of partnership lies in achieving financial benefits and mutual cooperation for growth and prosperity by leveraging each other's experiences. The importance of comprehending the principles of partnership is underscored, given the prevalence of business transactions involving collaboration. Islamic jurists have extensively elaborated on these principles, and the article aims to shed light on their application in the modern context through qualitative and analytical research. The researcher emphasizes that adherence to Islamic guidelines is crucial for establishing businesses in accordance with these principles. However, the contemporary era presents challenges in dealing with partnerships when strictly adhering to a single school of jurisprudence. Thus, the article advocates for the incorporation of insights from all schools of thought to gain a comprehensive understanding of partnership matters and overcome these difficulties.