Dhimmah

Dhimmah (Arabic: ذمة, literally 'responsibility' or 'accountability') is the Islamic jurisprudential concept of legal financial personality — the capacity of a person or entity to bear financial obligations, rights, and liabilities. Every legally competent individual has a Dhimmah (financial liability account) that is 'charged' when debts are incurred and 'discharged' when debts are repaid. Dhimmah is the foundation for Islamic contract law: a valid debt must be attached to the Dhimmah of a real or recognised legal person. In Kafalah (guarantee), a guarantor's Dhimmah becomes bound alongside the principal debtor's Dhimmah. In Hawala (debt transfer), the debt migrates from one Dhimmah to another. Corporate entities and Islamic financial institutions have Dhimmah by legal recognition under their jurisdictional frameworks. The concept is critical for structuring multi-party Islamic finance transactions where clear assignment of financial obligations across counterparties is required.