Q.28 Write a note on “Modaraba” and ‘Musharika”?
Modaraba means the business in which some person participates with their capital and the mangers or Modarab with their managerial skill. The profits are distributed among the financiers according to their invested capital.
NOTE: If the loss occurs due to Modarab or manager negligence then he will also share the loss? A Modaraba is legal person. A Modaraba company can sue and be sued. Govt. ofPakistanissued the Modaraba Company’s ordinance in 1980 to encourage the business on the basic of profit sharing.
The govt. has also appointed a registrar for the registration of Modaraba companies.
KINDS OF MODARABA
It has two kinds.
1. A business that has more than one objective is called multipurpose Modaraba.
2. The specific Modaraba that is established for a special purpose.
Following are the conditions of Modaraba.
A Modaraba company cannot do any business that is against the principles of Islam. The govt. ofPakistanhas set4p religious board that will give clearance to each Modaraba Company about its business activity.
APPOINTMENT OF AUDITOR
Each Modaraba Company will appoint the auditor approved by the registrar. He will certify his objectives and accounts of the company.
NO LOAN TO THE DIRECIORS AND OFFICERS
The officers, directors or their relatives can take the loan from the funds of the Modaraba Company in any shape.
SAME NATURE OF BUSINESS
The Modaraba company cannot engage itself in any business in competition which has the same nature with the Modaraba floated by it.
CANCELLATION OF REGISTRATION
The registrar can cancel the registration if Modaraba Company fails to comply the rules of the Modaraba ordinance.
Musharika means sharing. It is a business organization in which two or more than two parties contribute capital and labor. The profit and loss is distributed among the partners according to their agreed ratio. Musharika is governed according the agreement executed between the partners. Banks inPakistanhave been permitted for investment on the basis of profit and loss sharing. PLS account has been opened in every bank. If fewer than www.firstessaywritinghelp.com/ 3 errors, give the full 5 points