The formation of preference shares involves musharakah contracts or companies in Islam. However, preference shares have different specifications with ordinary shares. This distinction of specification prevents the law of preference shares to accept disputes between Muslim scholars both locally and globally. The objective of this study is to analyze the status of preference shares from Islamic perspective. The content analysis method was chosen as the design of this study. The qualitative data is collected through document analysis. Meanwhile, the process of analyzing is done by using descriptive approach. The finding shows that the concept of preference shares is appropriate for adoption but requires modification in the structure of the contract.
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