Finance

Pre-Funded Warrant

August 5, 2020
Islamic Finance

Constant Musharakah

August 5, 2020

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A type of musharaka (establishing a sharika) in which the partners’ shares in the sharika capital don’t change throughout the musharaka tenor. Rather, the shares remain constant, with each entitling its respective partner to his/ her share in profits (and associated liability for losses, if occurred) according to the terms set out in the contract (aqd).

For example, if three partners agreed at the contract date that their contribution percentages are 30%, 30%, and 40%, then, these percentages will be constant and can’t be changed over the contract life.

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