What is the meaning of the following terms in business partnership under Islamic law.
1) Shirkat-ul-Mufavdha شركة المفاوضة
2) Shirkat-ul-Anan شركة العنان
3) Shirkat-ul-Wajooh شركة الوجوه
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1) Shirkat-ul-Mufavdha / Mufawadhah : In this type of partnership all partners share capital, management, profit, risk in absolute equal proportions. This is a necessary condition for the validity of this partnership. Every partner who shares equally is a Trustee, Guarantor and Agent on behalf of the other partners.
2) Shirkat-ul-Anan / Inan : In this type of partnership there can be equality in capital, management or liability but not in all respects. This means that either profit is equal but not labor or vice versa.
3) Shirkat-ul-Wajooh / Wujuh : This is a partnership in goodwill. In this type of partnership, the partners have no investment at all, but they purchase commodities on credit and the profit earned is then distributed between them at an agreed ratio.
4) Shirkat-ul-Taqabal / Taqabbul : In this type of partnership all the partners jointly undertake to provide some services to their customers, and the fee charged from them is distributed among them according to an agreed ratio. This partnership is also known as Shirkat-ul-Aamal or Shirkat-us-sanai or Shirkat-ul-abdan.