Title: Regarding a Business Arrangement Question: I intend to enter into a contract with my friend who is doing his garment business. He offered me to invest in his business. I think that in this case I will be entering in a mushaarika agreement with him. Kindly tell me am I right or not? How is a mushaarika agreement written? What are its clauses? Should it be written on a stamp paper? Should it be attested from the notary public? Any guidance you want to give me in this matter, I will be very grateful. Answer: A business arrangement in which two or more partners join their efforts as well as capital to earn profits is generally termed as Mushaarika . On the other hand, if two or more partners join in such a way that one or more agree to pool in their efforts and the remaining agree to contribute in the shape of capital, then the arrangement is generally termed as Mudhaaraba . You may easily determine, in the light of the above definitions, whether your arrangement is a Mushaarika arrangement or a Mudhaaraba arrangement. As far as rules relating to the writing of the agreement and its recommended clauses are concerned, it is not a part of the Islamic Shari`ah . The spirit involved in the writing of the agreement, however, is in keeping with the directives of the Islamic Shari`ah . It is, therefore, recommended that the agreement should entail all such imaginable points that have the potential of becoming points of differences among the partners, in future. The primary purpose of this agreement, in fact, is to avoid, as far as possible, any disputes that have the potential of cropping up in future. It would, therefore be advisable that, if possible, the services of a legal person be hired for the purpose or the agreement be drafted in the light of similar previous agreements of other partnerships. Whether or not the agreement be written on a stamp paper or attested by a competent authority are again not a part of the Islamic Shari`ah . In my opinion, as it would be in keeping with the directives of the Islamic Shari`ah to make all possible arrangements to avoid any potential disputes in future, it would therefore by advisable that the agreement be given as much legal standing as can be afforded. 6 th July 2000