 In this module, we shall read a book, not the whole book. We shall read a page from a relevant book. This book is actually one of the textbooks referred at the start of this module. This is a book written by Dr. Mansuri and we shall pick up one page from this book for me to read with you so that we are on the same page when it comes to learning from reading. So this page which I have chosen, this is page 280 from the book written by Dr. Tahir Mansuri, Islamic Law of Contract and Business Transactions. I would be reading and you would be listening to me. I will explain certain terms, certain phrases, certain concepts which I find may be relevant for you to learn more about the concept. Page 280 of the book starts with Shafi School. It is an agreement whereby an owner hands over the capital to a worker who trades with it and the profit is shared by the parties. Apparently this is about the contract of Mudaraba and Shafi School's definition and view is given over here and it is about one party providing capital and the other party doing trade with it for them to share the profits. Humbly school, it is where a person gives his capital to another person for business in order to share the profit according to stipulation. Like Shafi School, here the emphasis is on profit sharing. Modern definition of Mudaraba. A renowned scholar Ali Al-Khafif has defined Mudaraba as contract for sharing the profit of a business in which one party contributes with capital and other with his labor. This is a very strange definition given that there is no reference to loss sharing like the other Shafi and Humbly School's very limited kind of definition. Dr. Rashid Khalil, another scholar has defined that it is a contract whereby a legally competent person hands over a known and defined capital to a person possessed with reason and discretion to trade with it for a part of profit defined in proportion. This is a lot more comprehensive definition than the previous ones because it refers to a legally competent person. What is a legally competent person? Someone who is adult, someone who is mentally sound, someone who is free and someone who is allowed to do that contract. This last bit is very important. It is important to note here that Islamic law, unlike English law, does not differentiate between a company and partnership firm. Therefore, Mudaraba can be a partnership firm as well as a company. This difference has given rise to a controversy between State Bank of Pakistan, Corporate Law Authority, CLA and the Finance Ministry as to which category of business organization a Mudaraba will be referred to and what rules of taxation, tariffs and revenue will be activated against it. CLA is actually a body which was before Securities and Exchange Commission of Pakistan was set up. So now the relevant body is SECP and apparently the author is referring to the practice of Mudaraba companies in Pakistan in which context this conversation or this controversy took place amongst these three parties. The stance of CLA is that it is a financial institution like House Building Finance Corporation, HBFC whereas SVP is arguing that it is a bank and subsequently it was decided that Mudaraba would be an entity independent of the Mudaraba management company and this would be regulated by SECP. Legitimacy of Mudaraba. The legitimacy of Mudaraba is established by the Quran, the Sunnah and Ijma page ends. Now on this page quite a number of definitions or rules around Mudaraba are given. Apparently in this book the author has taken a view which is very common amongst the law experts. From an economic viewpoint a more comprehensive definition of Mudaraba could have been the one which I have been using in this module. So Mudaraba is a contract between two or more parties in which one party provides capital and the other party does the business with it in such a way that if there is a profit that is shared between them in accordance with a pre-agreed profit distribution ratio and if the loss occurs the party providing capital would bear it. This should be the definition you should be memorizing. This is a good read of the book of this page and I have read it to make a point that not all the aspects about a contract, about a practice may be discussed in detail in one book or the other. So you have to read multiple sources to get a good understanding of the subject.