Mudarabah
"Mudarabah" is a special kind of partnership where one partner gives money to another for investing it in a commercial enterprise. The capital investment comes from the first partner, who is called the "rabb-ul-mal", while the management and work is the exclusive responsibility of the other party, who is called the "mudarib".
The Mudarabah (Profit Sharing) is a contract, with one party providing 100 percent of the capital and the other party providing its specialist knowledge to invest the capital and manage the investment project. Profits generated are shared between the parties according to a pre-agreed ratio. If loss happened, the first partner "rabb-ul-mal" will lose his capital, and the other party "mudarib" will lose the time an effort he invested in running the business.
Read more about this topic: Islamic Banking, Islamic Financial Transaction Terminology