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Islamic Finance


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Khultah al-Shuyu


Arabic (خلطة الشيوع) for a type or category of khultah that involves co-ownership (shuyu, ala al-shuyu) of identified assets (ayan) such as real estate property, equity, debt (dain), etc. The co-ownership involves commingling and pooling of such assets or economic resources so that they are treated as if contributed by one source (owner), for a specific purpose such as investing or establishing an obligation (e.g., nisab al-zakat).

As a distinct type of khultah, khultah al-shuyu’ is in effect a type of sharikah (sharakah) that is established by a factor beyond the direct will of the co-owners as in the case of inherited wealth- e.g., two brothers who inherit from their father a herd of sheep. It may also arise from the direct will of partners towards establishing a commingled pool of assets- e.g., two persons who purchase, on a 50%-50% basis, a herd of sheep. In either case, the partners or co-owners jointly own and control the pooled or jointly financed assets which are treated as if contributed by one owner.

It is also known as khultah al-ayan (خلطة الأعيان).


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