Sharikat al-aqd is a type of sharikah (partnership) that is formed by means of mutual agreement between two or more persons who agree that each of them contributes to the capital of the business and is entitled to a corresponding share in its financial results (profits or losses). The contracting parties agree to combine their assets, efforts, and/ or liabilities for the purpose of making profits.
On the other hand, sharikat al-mulk (also spelled sharikat al-milk) is another type of partnership which basically involves joint ownership (mulk in Arabic) by two or more persons in a particular property solely for the sake of ownership, rather than contractual agreement. This type of partnership is usually created by ways of inheritance, wills, or other situations where two or more persons come to hold an asset in common. Ownership gives every “partner” the right to share in the returns of underlying property or asset.
The following table enlists the main differences between the two types of sharikah:
| Sharikat al-Aqd | Sharikat al-Mulk |
| The contract of partnership is based on a contractual willingness to consummate the contract by partners involved- i.e., offer and acceptance. | Ownership results from a joint ownership of an asset (assets) due to non-contractual reasons such as inheritance (meerath) or gift (hibah). |
| The partnership is formed for the purpose of profit making and sharing. | The partnership is principally formed for non-profit purposes. |
| Profits are divided on a proportional basis, where the ratio of profit may differ from the ratio of capital contribution. | Profits are divided on a proportional basis, where the distribution is based on the ratio of shares in the joint ownership. |
| Under sharikat al-aqd, each partner can be an agent of the other partners in managing the partnership business. | Under sharikat al-mulk, partners are entitled to dispose of their respective share of the commonly held property. A partner is only a de facto rather than actual partner. |
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