Important conditions for Modaraba

1. A Modaraba who runs the business can be a natural person, a corporate body, a group of persons, or a legal entity.
2. The conduct of business of Modaraba shall be carried out entirely by the Mudarib within the framework of authorization given in the Modaraba agreement.
3. Money received by the Rabbulmal shall be placed under the absolute disposal of the Modarib.
4. The liability of Rabbulmal is limited to his investment except otherwise specified in the Modaraba contract.


Once a company us registered a a Modaraba company it is eligible to float and manage Modarabas. For floating a Modaraba an application shall be made by the Modaraba company to the Registrar or Modarabas. This application shall be accompanied by the following.

* Name and type of Modaraba
* The conditions and amount of Modarabas to floated.
* Nature of the business to be undertaken by Modaraba and its future financial prospects.
* Mode of distribution of profits.
* The amount to be subscribed by the Modarba company to the Modaraba in its own name.