Filter by Categories
Accounting
Banking

Islamic Finance




Mukharajah


Arabic (مخارجة) for a composition that is entered into by joint heirs to property, whereby some waiver their shares in return for some type of payment. In other words, the heirs agree to give one or more of them an amount of money or property to relinquish his share of the inherited property. If the property given is not from the estate itself, the agreement amounts to a sale contract, while if it is part of the estate, it is referred to as a contract of division or partition (taqseem). If the amount given is smaller than the deserved share of the inheritance, the deal is, then, a form of gift (hibah) from the relinquisher.

Mukharajah is also used in contracts such as mudarabah and musharakah where exiting partners relieve other partners as to their share in any undistributed profits. In this sense, mukharajah is the execution of the exit scenario by way of mubara’ah (mutual relief from obligations).

Linguistically, mukharajah (also takharuj) is derived from the verb akhraja, i.e., to take out or put out.



ABC
The last three decades have witnessed the modern rebirth of Islamic finance both in terms of literature and practice. Islamic banks and ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*