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    Mudarabah Termination

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    SK Lashari
    A Mudarabah can be terminated when the specified contract period expires, or if either party provides notice. If terminated by the capital provider, the manager continues duties until informed but future actions are still part of the Mudarabah. Upon termination, all assets are liquidated, outstanding loans and payments collected. Profits are distributed to the capital provider and manager according to their ratio, after returning the initial capital. If losses occur, prior distributed profits can be retrieved to refund the capital provider first before any remaining profit is shared.

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    Mudarabah Termination

    Uploaded by

    SK Lashari
    696 views1 page
    A Mudarabah can be terminated when the specified contract period expires, or if either party provides notice. If terminated by the capital provider, the manager continues duties until informed but future actions are still part of the Mudarabah. Upon termination, all assets are liquidated, outstanding loans and payments collected. Profits are distributed to the capital provider and manager according to their ratio, after returning the initial capital. If losses occur, prior distributed profits can be retrieved to refund the capital provider first before any remaining profit is shared.

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    for master students

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    A Mudarabah can be terminated when the specified contract period expires, or if either party provides notice. If terminated by the capital provider, the manager continues duties until informed but future actions are still part of the Mudarabah. Upon termination, all assets are liquidated, outstanding loans and payments collected. Profits are distributed to the capital provider and manager according to their ratio, after returning the initial capital. If losses occur, prior distributed profits can be retrieved to refund the capital provider first before any remaining profit is shared.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    696 views1 page

    Mudarabah Termination

    Uploaded by

    SK Lashari
    A Mudarabah can be terminated when the specified contract period expires, or if either party provides notice. If terminated by the capital provider, the manager continues duties until informed but future actions are still part of the Mudarabah. Upon termination, all assets are liquidated, outstanding loans and payments collected. Profits are distributed to the capital provider and manager according to their ratio, after returning the initial capital. If losses occur, prior distributed profits can be retrieved to refund the capital provider first before any remaining profit is shared.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Termination of Mudarabah

    The Mudarabah will stand terminated when the period specified in the contract expires.
    It can also be terminated any time by either of the two parties by giving notice. In case
    Rab-ul-Maal has terminated services of Mudarib, he will continue to act as Mudarib until
    he is informed of the same and all his acts will form part of Mudarabah.
    If all assets of the Mudarabah are in cash form at the time of termination, and some
    profit has been earned on the principal amount, it shall be distributed between the
    parties according to the agreed ratio. However, if the assets of Mudarabah are not in
    cash form, it will be sold and liquidated so that the actual profit may be determined. All
    loans and payables of Mudarabah will be recovered. The provisional profit earned by
    Mudarib and Rab-ul-Maal will also be taken into account and when total capital is
    drawn, the principal amount invested by Rab-ul-Maal will be given to him, balance will
    be called profit which will be distributed between Mudarib and Rab-ul-Maal at the
    agreed ratio. If no balance is left, Mudarib will not get anything. If the principal amount is
    not recovered fully, then the profit shared by Mudarib and Rab-ul-Maal during the term
    of Mudarabah will be withdrawn to pay the principal amount to Rab-ul-Maal. The
    balance will be profit, which will be distributed between Mudarib and Rab-ul-Maal. In this
    case too if no balance is left, Mudarib will not get anything.

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