Arabic (شركة) for “a partnership or company”; an agreement between two or more parties whereby their assets or funds are commingled or their labor, services, obligations and liabilities are combined, with the aim of doing business and making profit. Under shari’ah, sharikah has its origins in sharikat al-aqd (contractual partnership) which is mainly classified into fiqh-nominate partnerships and modern shari’ah-compliant corporations. The traditional fiqh-nominate partnerships are: sharikat al-inan (general contractual partnership), sharikat al-mufawadah (agency-like partnership), sharikat al-‘amal (vocational partnership) and sharikat al-wojooh or zhimam (liability partnership).
Modern corporations are generally classified as: stock companies, joint-liability companies, partnerships in commendam, companies limited by shares, allotment partnerships, and diminishing partnerships.
The concept and modus operandi of sharikah is based on musharakah mode of financing.
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