Contemporary companies through fiqh's lens

The joint-stock company and the LLC did not exist in the classical manuals, but their elements (capital, partners, delegated management, transferable shares) match known categories: contemporary fiqh evaluates them by analogy with sharikat al-'aqd (contract partnership) and mudaraba, and AAOIFI has codified them.

Qualifying modern forms

• The LLC and the joint-stock company: a form of sharikat al-'aqd with capital divided into equal or unequal shares; AAOIFI examines these forms in its Standard No. 12 "Sharikah (Musharakah) and Modern Corporations": limited liability is studied there under the distinct legal personality, preservation of creditors' rights remaining the condition of lawfulness.
• The non-shareholder manager: a mudaraba structure (partners' capital, the manager's work, profit shared by statute): a lawful qualification, framed by AAOIFI Standard No. 13 (Mudarabah).
• Holdings and subsidiaries: lawful by nature, the analysis bearing on the real activities of the entities (no interest financing).

Statute clauses to watch

• Voting and exit rights: lawful and useful (partners' agreements compliant with tahkim and khiyar).
• Profit-sharing clauses: participation in profits is lawful; clauses guaranteeing partners a fixed yield fall under riba (a disguised loan).
• Financing: avoid interest borrowing; idle treasury placed in compliant products (mudaraba, sukuk).

Investing in listed companies

AAOIFI criteria (Standard No. 21, "Financial Paper (Shares and Bonds)"): lawful core activity, interest-bearing debt at most 30% of market capitalization, interest-bearing deposits and cash at most 30%, non-compliant income at most 5% then purified. The Muslim investor thereby holds a complete evaluation grid inherited from the fiqh of sharikat.

Practical note

The Muslim founder chooses statutes with shared profits (no guaranteed rate), a manager paid by fixed fee or by share, and an interest-free treasury: three choices that align the company with fiqh from the drafting stage.