Limited Liability Concept in Islam

Dr. Mahmoud El-Gamal writes that

"One of the traditional verses to start a sermon is [59:18]:
يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَلْتَنْظُرْ نَفْسٌ مَا قَدَّمَتْ لِغَدٍ وَاتَّقُوا اللَّهَ إِنَّ اللَّهَ خَبِيرٌ بِمَا تَعْمَلُونَ
The traditional translation is: "O ye who believe! Fear Allah, and let every soul look to what (provision) he has sent forth for the morrow. Yea, fear Allah: for Allah is well-acquainted with (all) that ye do." I would not limit the collective order اتَّقُوا, which is repeated twice in the plural, I would not limit it to "fear", because the notion of taqwa encompasses God-consciousness, God-wariness, and other concepts besides fear.

Our focus for today is on the following: the verse does not say "let every soul" or "let each soul" (و لتنظر كل نفس) but rather "let a soul" (و لتنظر نفس), focusing on the community of the faithful (addressed: يَا أَيُّهَا الَّذِينَ آمَنُوا) as a single organism. In other words, although we are accountable individually, we are also accountable for the future (مَا قَدَّمَتْ لِغَدٍ) that the community as a single organism forges for itself."

So, we are jointly and severally liable for the deeds of the community. If so, then the concept of limited liability company in Islamic Finance becomes doubtful as every shareholder is jointly and severally liable for all the deeds including all liabilities of the company. Think for a moment, had this been the case, would large number of shareholders having minority shareholding let happen misdeeds in corporate finance e.g. the case of "Enron".

The concept of "limited liability" is worth revisiting in the context of recent global financial crisis and more so in the context of Islamic Finance.