The Concept Of Artificial Legal Entity And Limited Liability In Islamic Law

Many orientalists, among others Joseph Schacht  , are of the view that Islamic Legal System does not recognize the concept of “Juristic Person” i.e. Corporations, Universities and Organizations. This is our point of departure and we attempt to highlight in this paper that Islamic Law recognizes “Juristic Person”. Admittedly though the term “Juristic Person” is not being mentioned specifically by the classical texts of Islamic Jurisprudence, it is totally untrue that Islamic Legal System does not recognize the concept of “Juristic Person”:; the non-existence of nomenclature does not negate the existence of the concept as early as Islam itself. The Shari’ah rulings and principles concerning “Juristic Person” can be found in the Holy Quran and Sunnah of Prophet Muhammad S.A.W. The classical scholars of Islamic Legal System had earlier discussed and developed an equivalent doctrine which formed a valid ground for the concept of “Juristic Person” which forms a part of Islamic Legal System. 

The first part of this paper will focus on the concept of “legal person of the natural person” which is closely attributed to the legal person of human beings. The second part will highlight the Islamic classical texts exposition of the concept of “Juristic Person”. 

This paper will further discuss few situations which had been laid down by the jurists that gave rise to the rights and liabilities of the “Juristic Person”, which actually manifest the beauty and treasures of the Islamic Laws  in advocating its flexibility and organic nature to any future commercial concerns it might encounter.