Practical Laws: Partnership

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If the intention behind the draw is granting each individual’s share in the object to the person who wins it, there is no harm in it. Yet, if the intention is transferring the joint ownership to the person who wins the lottery per se or their intention is mainly wining and losing, it is not shar‘ī.

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The partner has no right to force the other partner to sell him his share. Nor has he the right to object to the partner’s selling his own share to another party. However, he can resort to pre-emption, provided that the prerequisites are available and the transaction is concluded.

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If the value of the shares of a company or a bank is based on the shares themselves and their credit was issued by an authorized person, there is no objection to buying and selling them. If the value of the shares is regarded as the value of the entire plant, mill, company, or bank as the capital thereof, in that each share constitutes part of the capital, there is no objection to buying and selling such shares provided that the total number of shares is known, besides other information with a view to avoiding any risk that could be thus perceived in the common view.

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Getting the auction underway and tendering a higher price by one of the partners, or any other party for that matter, is not sufficient to complete the sale and own the business. Therefore, if the sale of shares has not been concluded properly and in a shar‘ī way, the partnership should remain intact. However, if the sale has gone through in a proper manner, the delay in paying the price for the business by the buyer should not render the sale transaction invalid.

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If the buyer, who revoked this sale after he had got his checks back, sold the share to a third party before the cancellation, this sale is valid. If he had sold the share after the cancellation, this sale cannot go through unless you sanction it.

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There is no problem in that.

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If the husband [partner] bought the property for himself or his wife on credit, then paid for it with money from the company, the property is his and his wife’s. However, he becomes indebted to the rest of the partners insofar as their shares are concerned. If he exchanged it with the very company’s money, the [validity of the] transaction proportionately hinges on the consent of the other partners.

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It is not permissible for any of the partners to have the right of disposal in a jointly owned property without the agreement of all the heirs. Nor is it permissible for any one of them to engage in any transaction concerning the property unless they secure the permission of all the partners.

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This sale is valid and, therefore, enforceable insofar as the share owned by the party who sold it or gave permission to sell it. As for the remaining shares, this is dependent on their respective permissions, irrespective of how the company came into being.

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The insurance company cannot indemnify for the damage because it falls outside the remit of the policy. The cost of repairing the property, and indemnifying for any loss which is not the responsibility of others, should be borne by the owner. As for the bank, if it is a civil partner in the property, it should bear a share of the cost of repair proportionate to its stake unless the damage occurred due to somebody’s default.

Answer

A) 1. It is permissible for any partner to sell his own share without any need to obtain the permission of the other partners. 2. It is not permissible for any partner to occupy a jointly owned property unless he secures the permission of the other partners. 3. It is not permissible for any partner to choose his own share of the jointly owned property without the permission of the other partners.

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If the land is a common property, any involvement in it hinges upon consent of all those who have a vested interest in it. If it is anfāl, the decision concerning it should be left to the Islamic state. It is not permissible to have any involvement in the property without the government permitting it. If it is a public utility, the same ruling is applicable.

Answer

Neither the other partners nor anyone else can coerce the partner to sell his share, especially where partitioning is possible. In this case, each of the partners can demand from the others to partition their share unless the law of the Islamic government does not permit the partitioning of the plantation. Such legal requirements have to be respected. If the jointly possessed property cannot be demarcated, any partner can have recourse to the authorized religious authority to force the unwilling party to sell their share or buy the shares of the other partners.

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The elder brothers should compensate any amounts that have been spent of the jointly owned property, which the other brothers did not equally spend. They [i.e. the younger brothers] have the right to demand compensation. Then the remaining amount of the jointly owned property should be distributed equally among all the brothers. Another way of distribution would be that each of those brothers, who have spent less than the others, should take an equal share of the property to be put on a par with those who have enjoyed spending of the jointly owned property. Once this is done, the remaining amount should be distributed equally between them.

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Should the company offer the members facilities and services and give them tea provided that they are its members and deal only with it, there is no objection to that. Nor is there any harm in such membership.

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Making a decision about dividends rests with the shareholder himself. Thus, if someone else spends the dividends without either power of attorney or permission from the shareholder, he should be held responsible to compensate the shareholder, even though the income is spent in charitable causes.

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For shareholders, it is not necessary to have equal shares in the investments. However, there is no objection to distributing the profits equally between the partners, regardless of the percentage of their respective shares in the company. As regards running the business, each of them will be renumerated for his work if nothing is stipulated in the contract in this regard.

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Using the transport means and other company property in non-company business is dependent on the permission of the shareholders or their official agents.

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If the members — as required by the company charter — undertook to form the arbitration committee when it is necessary to do so, they have to abide by their undertaking. The issue of some shareholders relinquishing their rights should not be taken as a pretext for not honoring the pledge concerning the setting up of the arbitration committee.

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In itself, partaking in the ownership and sarqoflī of a commercial place is not sufficient for having a part in the [actual] trading and getting a share of the profits. The yardstick is to have a share in the running capital. Accordingly, if the continuation of one of the partners in running the business has occurred after they decided to divide the jointly owned capital in a proper way so much so that one of them took away his share, the latter should have no right in the transactions his [former] partner has concluded. However, should there be any transactions before the actual breaking up of the company, the partner has a right in the commercial activity of his partner in a measure equivalent to his stake of the capital.

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No partner has the right to prevent any of the other partners from getting their share and also it is not permissible to deprive them of access to their property fearing that they might use their property in the avenues of evil, disobedience, and other unlawful activity. The partners must accede to the request of any partner wanting to break ranks. It is to be noted, however, that the partners who want to go it alone should be mindful of their duty as not to utilize their property in bankrolling forbidden activities. For their part, the other partners should forbid them from evil if they use their property in any avenue that is deemed ḥarām.