Businesses are not alien to Islam for it has been the practice of Prophet Muhammad p.b.u.h. The Holy Prophet himself was a successful trader. In Islam, particularly the Arab countries, they refer the entity carrying out the
businesses and commercials as ‘syirkah’ vis-à-vis corporation or company under Western concept. Whilst the Western distinguishes company from partnership, syirkah in Islam refer to both company and partnership.Nevertheless, the different types of these syirkah are reflected in the diversity of their categories, which comprised of al-‘inan, al-abdan, mudharabah, wujuh and mudharabah. The essential part of a syirkah is that it is contractbased,where individuals came together and entered into a contract with an agreement to distribute the profits amongst themselves. Individuals are the backbone of a syirkah in Islam. Whereas, a company in the conventional system focuses on the concept of body corporate rather than natural human
being, i.e. individuals. In this modern world, the applications of the notion ‘body corporate’ are also integrated into some of Islamic institutions including those that were established in Malaysia. The Islamic institutions are now leading a corporate way of lifestyle. This paper will highlight some of the Islamic institutions in Malaysia and the analysis of legal provisions which set them up as corporate entities. In the same parallel also, the author will identify the rights and criteria arising from such body corporate – and the Islamic perception on such corporate lifestyle
