A controlled firm is defined as any firm that is effectively owned and controlled by a different firm. This ownership and control are usually due to the other firm owning a certain percentage of the controlled firm’s stock or voting shares.
Modaraba is a special kind of partnership where one partner gives another money to invest in a commercial enterprise. The investment comes from the first partner, who is called “rabb-ul-mal.” At the same time, the management and work is an exclusive responsibility of the other, who is called “mudarib,” and the profits generated are shared in a predetermined ratio.
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