General English Fatwa Translation Darul Ifta, Darul Uloom Deoband

Reference: 02 Date:

QUESTION

Respected Mufti Sahib

Darul Uloom Deoband UP

Assalamu Alaikum wr wb

What the Ullama and Muftis say about the question mentioned below:

What are the conditions to buy shares of a company? Please, explain in the light of Shariah.

Questioner:

Muhammad Saleem, Meerut

Fatwa: 316/189/L/1431

! It is allowed to buy and purchase shares under the conditions below:

(1) The company should not get involved in unlawful business, like it should not be interest-

based bank, insurance company, wine company, etc.

(2) All the assets and possessions of the company should not be in cash but it should have some

frozen assets for example building, land and the company is in existence and these things are

known surely. Otherwise, selling with difference will be interest.

(3) If, after having become a member of the company, it is known that the company is involved in

any sort of interest transactions, then one should raise objection against it in its meetings.

(4) When the profit is divided, the part of the profit gained from the interest dealings should be

given to the poor without an intention of reward.

(5) The purpose of dealing in shares should be to achieve partnership in the business, it should

not be to earn profit only by equalizing profit and loss wherein the shares are neither possessed

nor the possession is meant, it is a form of gambling (Satta) which is unlawful.

(6) It should be known to both the parties how much percentage of profit and loss they will

share, e.g. the percentage of profit and the loss as per the percentage of capital.

Written by: Fakhrul Islam, Assistant Mufti, Darul Ifta, Darul Uloom Deoband

Verified by: Mahmood Hasan Buland Shahri, Naib Mufti Darul Ifta, Darul Uloom Deoband

Zainul Islam, Naib Mufti, Darul Ifta, Darul Uloom Deoband

Waqar Ali, Assistant Mufti, Darul Ifta, Darul Uloom Deoband

Translated by: Muhammadullah Khalili Qasmi, Internet Dept, Darul Uloom Deoband

Date: 29/02/1431 = 14/02/2010