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· 6 min read

Structuring a Shariah-compliant deal: a manager's checklist

Structuring a Shariah-compliant raise is as much about discipline as doctrine. This checklist walks a manager through the decisions that make a Mudarabah deal sound, compliant, and ready to sign.

1. Fix the terms

Set the capital (ra's al-mal), the profit-sharing ratio, and the term. Keep the ratio attached to realized profit, never to the capital. Decide which terms are Shariah-fixed and therefore not negotiable.

2. Define the parties

Identify the rabb-ul-mal(s) and the mudarib clearly, with legal identities. Ambiguity about roles and rights is exactly the kind of uncertainty (gharar) sound structuring avoids.

3. Confirm eligibility

If you're raising under Reg D 506(c), every investor must be accredited, and you must take reasonable steps to verify it — not just collect a checkbox. Build verification in before accepting capital.

4. Keep an honest record

Itemize the cap table, sign against a fixed agreement, and log every term change, acceptance, and distribution. An audit trail protects every party and keeps the deal defensible.

5. Get your own review

Software can enforce structure, but it does not issue fatwa or give legal advice. Engage your own Shariah and legal advisers for the specific deal. This guide is educational information, not advice.

This is educational information, not legal, tax, investment, or religious advice. Engage your own qualified advisers for any specific deal.

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