Proceedings of the International Conference on Sustainable Innovation on Humanities, Education, and Social Sciences (ICOSI-HESS 2022)

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Comparative Study on the Legal Framework of Corporate Group Under Common Law and Shariah

Authors
Nazri Ramli1, *, Zuhairah Ariff Abd Ghadas1, Hartinie Abd Aziz1
1University of Sultan Zainal Abidin, Gong Badak, 21300, Kuala Nerus, Terengganu, Malaysia
*Corresponding author. Email: nazriramli87@gmail.com
Corresponding Author
Nazri Ramli
Available Online 24 December 2022.
DOI
10.2991/978-2-494069-65-7_5How to use a DOI?
Keywords
Corporate Group; Common Law; Shariah
Abstract

Under common law, the legal framework of corporate group is derived from the ownership of share by holding over its subsidiaries. The parent company has majority shareholding ownership and control in the subsidiaries. From Shariah perspective, group of companies is discussed under the sharikah concept founded under the wakalah contract between its partners. This article discusses the legal framework of corporate group under the common law and Shariah (Islamic Law). The study refers to Malaysia as a sampling country that adopts the common law and Saudi Arabia and Kuwait as Shariah-sampling countries. The discussion is necessary since the legal framework of corporate group under both legal systems differs in many aspects, and any attempt to apply each other would lead to inconsistent results. The doctrinal and comparative analysis adopted in the study found that due to dissimilar frameworks, it is untenable to directly recognise the common law of corporate group under sharikah or vice versa. Modifications of the former are needed for it to be compatible with the latter. Although the legal framework of corporate group in the three countries is based on a separate legal entity doctrine, both Saudi Arabia and Kuwait laws adopt a sharikah approach to the former. This study is crucial to reveal the extent to which a group of companies can be structured in accordance with sharikah under the Shariah.

Copyright
© 2022 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Conference on Sustainable Innovation on Humanities, Education, and Social Sciences (ICOSI-HESS 2022)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
24 December 2022
ISBN
978-2-494069-65-7
ISSN
2352-5398
DOI
10.2991/978-2-494069-65-7_5How to use a DOI?
Copyright
© 2022 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Nazri Ramli
AU  - Zuhairah Ariff Abd Ghadas
AU  - Hartinie Abd Aziz
PY  - 2022
DA  - 2022/12/24
TI  - Comparative Study on the Legal Framework of Corporate Group Under Common Law and Shariah
BT  - Proceedings of the International Conference on Sustainable Innovation on Humanities, Education, and Social Sciences (ICOSI-HESS 2022)
PB  - Atlantis Press
SP  - 32
EP  - 52
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-494069-65-7_5
DO  - 10.2991/978-2-494069-65-7_5
ID  - Ramli2022
ER  -