"Say (oh...
"Say (oh, Muslims) we believe in God and that which is revealed to us and that which was revealed to Abraham and Ishmael, and Isaac and Jacob, and their children, and that which Moses and Jesus received and that the prophets received from their Lord. We make no distinction between any of them and unto Him we have surrendered." The last prophet in the chain of God was Muhammad (PBUH). He was born in Arabia in the sixth century C.E.
He descends from the lineal chain of Abraham and his son Ishmael, being a member of Banu Hashim family, who were the holders of Mecca. People knew him as a man of excellent character, cultured manners, and called him "the trustworthy", even before his delegation as a prophet. His revelation by God, claims to be the book of guidance for the whole humanity for all times, and mentions Muhammad as the last Prophet of God- The seal of Prophets.
Once he died, Prophethood ended but not the divine guidance and leadership of humanity that continued in the mind of the Shia. 2. Imamate The Shia believes that humanity is in need of sustained spiritual guidance, provided by the Imam, who is the guardian and guide of all Muslims politically and spiritually. They hold that Muhammad explicitly designated his cousin and son-in-law Ali as his Khalifa (Successor).
Thus, Shia believes Muhammad designated Ali and his direct descendants to serve as the Imams (wali-leaders) of the Muslim community. This assertion implies that, while the cycle of Prophethood ended with Muhammad, the cycle of Imamate began with Ali and continues amongst his direct descendants. For Shia Muslims, an Imam is a leader (wali), whose guidance extends to spiritual and temporal matters. In other words, an Imam can sanction new laws because he has direct contact with God.
This direct contact makes an Imam infallible and invests in him the prerogative of interpreting the Quran, thereby gradually revealing its esoteric meaning. On the ground of Ghadir Khumm, Muhammad declared "To whomsoever I am Master, Ali is his Master" and following this principle is one of the fundamentals of Shia Doctrine, therefore, they believe that Ali ibn Abu Talib is the 1st Imam to teach the correct interpretation of Islam, the successor of Muhammad.