Limited Company is Musharaka

Limited Company, hereinafter referred to as the company, is a legal entity which is a capital alliance, established under the agreement, to conduct business with all of the basic capital divided into shares and meet the requirements set forth in this law and its implementing regulations. (Article 1, paragraph 1 of Law No. 40 of 2007)

Musharaka (shirkah or syarikah or union or partnership) is a common form of business for the results where two or more people donate finance and business management, the proportion can be the same or not. Profits are shared according to the agreement between the partners, and the losses will be distributed according to the proportion of capital. Musharaka transactions based on the desire of the parties to work together to increase the value of their assets jointly with integrating all resources.

Based on the both definitions, company has the same meaning with Musharaka, so in Islamic Economics, limited company include of Musharaka.

source: UU No.40/2007

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