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Volume :16 Issue : 44 2001      Add To Cart                                                                    Download

Trading with Shares of Companies whose Objectives and Activities Are Lawful, But They Are Dealing with Bank Loans

Auther : Prof. Ahmad Al-Hajji Al-Kurdi

Terminologically, a share is the holder’s share in the capital of the company. It is represented by a legal document that proves the holder’s rights in that company.

 

Shares’ characteristics:

     

  1. Their nominal values are equal and fixed by law or system,

     

     

  2. The rights of shareholders are equal, except in case of preference shares.

     

     

  3. Shareholders are responsible according to their shares values.

     

     

  4. Single share is indivisible.

     

     

  5. Shares could be circulated.

     

     

    Shares are of various types from different aspects:

       

    1. Concerning the amount to be paid, it could be paid in cash or in kind.

       

       

    2. Concerning the form, there are nominal shares, bearer shares or order shares.

       

       

    3. Concerning rights of holders, either ordinary shares or preference shares.

       

       

    4. Concerning redemption to the holder, either founders’ shares or bonus shares.

       

 

In regard to share value, they are different: Nominal value, real value, market value, or issue value.

 

As for circulating shares from the Islamic view, it is permitted to be transacted in any way, as long as the company’s establishment, systems and activities are not violating the Islamic Laws. The Academy of Islamic Jurisprudence in Jeddah had approved this in its resolution No. 65/1/7, in its 7th session.

 

Reba (Interest, usury) dealings with interest banks are Islamically prohibited, except in necessity cases, and loans to or from such banks are not among these cases except in very scarce cases. Companies whose incomes have included amounts of prohibited interests must try immediately to get rid of them without trying to benefit from them in any way. Any person whose wealth has been contaminated with prohibited money must do the same. In case of not knowing the prohibited amount, he must take amounts that make him sure that his wealth has become free from any illegal earning.

 

The rule is that no company or a businessman should try to widen its / his business unless there is enough lawful financing. Also, they should not get loan, even interest-free one, to widen business. If a need arises after widening business on a lawful basis, they can get interest-free loan if available. It is prohibited in such case to get a loan on interest basis except in necessity situations to meet great loss, not to seek gains. When unnecessarily involved in Reba, they must spend of their lawful wealth a part equal to that unlawful part obtained.

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Nov 04, 2019

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