This is called loaning (Qiradh), and it is the partnership of a body with property. It means that one pays his property to another person so as to trade with it for Him and the resulting profit is divided amongst them according to what they stipulated. The loss in the Mudharaba is not subject to the agreement of the partners but rather to that which came in the Shar’a. This loss is defined by Shar’a to be only on the property, none of it is upon the body (Mudharib). Even if the capital partner and the mudharib were to agree that the profit and loss is divided among them, the profit would be between them while the loss is only on the property. This is because the company is similar to representation (Wikala) and the agent (Wakeel) does not guarantee. The loss is upon the principal (Muwakkil) only. This is due to what ‘Abdurraziq narrated in Al-Jam’i from ‘Ali (ra): “The loss (Al-Wadhi’a) is on the property and the profit is according to what they stipulated.” The body however does not lose property, it loses what it spent of effort only and the loss remains on the property. Mudharaba would not be valid until the property is given to the worker (‘Amil) and He is given a free hand over it, because Mudharaba requires handing over the property to the Mudharib. In Mudharaba, the share of the worker must be defined and the property used in the Mudharaba contract must be of a defined amount. It is invalid for the owner of the property to work with the Mudharib, even if He stipulated to do so. This is because He has no right to dispose of the property that belongs to the company, on the company’s behalf. It is the mudharib who disposes and works, and He has full control over the property. This is because the contract of the company was concluded on the body of the Mudharib, and the property of the partner. It is not concluded on the body of the owner of the property, who is like a foreigner to the company and who does not have the right to dispose of anything which belongs to the company. However, the Mudharib is restricted in his disposal to that with which the owner of the property permitted. He is not allowed to disagree with Him because He disposes by permission. If He permitted Him to trade with wool only or He prevented Him from shipping the goods by sea, the owner has this right to restrict Him in these matters. However, this does not mean that the owner of the property disposes in the company. Rather it means that the Mudharib is restricted within the limits defined by the owner of the property. Despite this, the disposal in the company is confined to the worker (Mudharib) only, and the owner of property has no right of disposal.