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Glossary
Musharakah
Joint partnership
A joint-venture partnership where all partners contribute capital and share profit and loss in proportion to their stake.
Unlike a Mudarabah — where one party provides all the capital and the other provides management — in a Musharakah every partner contributes capital and may participate in management.
Profit is shared by an agreed ratio; loss is shared strictly in proportion to each partner's capital contribution. It's the structure to reach for when the parties want shared ownership and shared downside.
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