Musharakah
مشاركة
Pronunciation: moo-SHAH-rah-kah
A joint partnership where all parties contribute capital and share profits and losses proportionally.
Definition
A joint partnership where all parties contribute capital and share profits and losses proportionally. In its most common form — Musharakah Mutanaqisah (diminishing partnership) — the buyer gradually purchases the provider's share of a property over time while paying rent on the provider's portion. Unlike Mudarabah (where only one party provides capital), all musharakah partners contribute financially and share risk.
Profits can be distributed in any agreed ratio, but losses must be shared proportional to capital contribution. This is one of the two foundational partnership structures in Islamic finance.
Related Terms
Musharakah Mutanaqisahمشاركة متناقصة
Diminishing partnership — a widely used halal home financing structure.
Diminishing Partnershipمشاركة متناقصة
A co-ownership arrangement where the buyer gradually purchases the provider's share — a common halal home financing structure.
Mudarabahمضاربة
A profit-sharing partnership where one party provides capital and the other provides expertise.
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Musharakah (مشاركة) — A joint partnership where all parties contribute capital and share profits and losses proportionally. A joint partnership where all parties contribute capital and share profits and losses proportionally. In its most common form — Musharakah Mutanaqisah (diminishing partnership) — the buyer gradually purchases the provider's share of a property over time while paying rent on the provider's portion.
- A joint partnership where all parties contribute capital and share profits and losses proportionally.
- Category: Financing Structures
- Related: Musharakah Mutanaqisah, Diminishing Partnership, Mudarabah
- Compare related Shariah-compliant products on HalalWallet
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Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-07-01
Editorial Team, HalalWallet
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