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In Mudarabah agreement, the contract made between the investor (or investors) with the entrepreneur or investment manager who called mudarib. Both risks and benefits are shared. If lucky, both parties receive the benefit according to a previous agreement. If a loss, then the capital owners bear the losses from the capital had been sown while mudarib lost time and effort.

Transaction Process

Mudarabah process, the generic is as follows:

* Stage 1: Investors and mudarib agree the nature of cooperation and sharing of benefits.
* Stage 2: The investor provides capital to mudarib.
* Stage 3: Mudarib conduct business activities in accordance the agreement by both parties.
* Stage 4: The benefits of investment are shared between investors and mudarib.

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• sources of taxation

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