Musharakah (مشـاركة) — both parties contribute capital (cash, goods, or assets) and become co-owners.

1. Profits are shared by agreed ratios.
2. Losses are shared in proportion to capital.
   Example: Two people open a café — one invests 60%, the other 40%. Profits and losses match these shares.

Mudarabah (مضاربة) — a partnership of capital and labor.

1. The investor provides the funds.
2. The manager contributes effort, skills, and expertise.
3. Profits are shared as agreed; losses are borne only by the investor.
   Example: An investor funds an online business, and the manager runs it. No profit means no payment for the manager.

Key difference:
In Musharakah, all partners invest and share risks. In Mudarabah, one provides capital, the other labor, and only the investor risks losing money.

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