Al-Takharuj and Corporate Continuity:

Reconciling Islamic Inheritance Law with Emirati Commercial Legislation

Ayesha Mubarak Aldhabah Alketbi

Turki AlQahtani

 

Abstract: Inheritance transitions in family-owned holding companies often trigger complex legal and governance challenges, particularly when heirs seek to exit ownership without destabilising the enterprise. This study examines the jurisprudential and legislative dimensions of al-takharuj—a withdrawal mechanism rooted in Islamic law—as a strategic tool for resolving inheritance disputes while preserving corporate continuity. It argues that al-takharuj, traditionally recognised in Islamic jurisprudence as a consensual contract among heirs, offers a viable framework for managing intergenerational ownership transfers in holding companies. By analysing the legal codification of al-takharuj under Federal Decree-Law No. (41) of 2024 on Personal Status and Federal Decree-Law No. (32) of 2021 on Commercial Companies in the UAE, the paper demonstrates how this classical mechanism has been adapted to meet the demands of modern corporate governance. The central thesis is that integrating al-takharuj into contemporary legislation not only aligns with Sharia principles but also enhances legal clarity, reduces succession-related conflicts, and supports the long-term stability of holding companies in the Gulf region.