A paper presented at the Thirteenth Session of the International Islamic Fiqh Academy of the OIC
In these few pages I have done my best to study the issues related to modern companies, holding companies, and their Sharīʿah rulings, exerting my limited efforts to compile information about the topic. In doing so I have relied upon a number of resources and web pages to reach fruitful results about this subject, which is more complex than it first appears. Starting from consideration of the enormous, rapid development being witnessed today in all fields of the financial and commercial worlds, I have borne in mind the importance of highlighting the general rules of the Sharīʿah and its lofty principles that should be adhered to in dealing with new contemporary issues. I have striven my utmost to present balanced academic analysis and criticism of contemporary views about modern companies and contracts, especially with regard to their fiqh classifications and the associated Sharīʿah rulings.
I have discussed holding companies and multinational corporations in an attempt to clear up ambiguities surrounding them and to arrive at guiding principles for understanding them. I have examined the method of characterising them in order to appropriately classify them according to the Sharīʿah. In addition, I have shed light on the zakat rulings for these companies, determining that there is no essential difference between the zakat rulings for the shares of joint-stock companies and the shares of holding companies, considering that holding companies are a kind of joint-stock company. I have discussed the issues related to multinational companies in detail in order to reach resolution about them, determining that their zakat rulings differ according to the bases upon which they are established. If they are established as joint-stock companies, then the zakat rulings for joint-stock companies would apply, and if they are established as limited partnerships, then the zakat rulings for limited partnerships would apply, and so on.
The paper is divided into six sections:
The first section discusses in detail the linguistic and technical definitions of sharikah (partnership) and its types in Islamic jurisprudence.
The second section deals with the definitions and types of contemporary companies.
The third section presents contemporary scholars’ characterisations of today’s companies.
The fourth section undertakes methodological comments on the contemporary scholars’ characterisations and proposes academic principles for dealing with contemporary companies, contracts and transactions.
The fifth section details the concept of holding companies and their most important characteristics, and does the same for multinational corporations.
The sixth section explains the zakat rulings for holding companies and multinational corporations.
