Shirkah al-‘inan

Dictionary term

Definition of "Shirkah al-‘inan "

A partnership agreement in which the partners may have equal equity but unequal rights to profit, unequal equity with equal rights to profit or unequal equity and unequal rights to profit. It comprehends mutual agency but not mutual surety. By virtue of this mutual agency, each of them does not become liable for that which is owed by his colleagues. Liability of partners towards third parties is several but not joint; within the partnership, liability for obligations arising from partnership affairs is joint. This principle covers all the transactions on behalf of the firm in which members are free to engage.

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