Partnership in company that sells alcohol
Fatwa No: 320413

  • Fatwa Date:22-2-2016 - Jumaadaa Al-Oula 14, 1437
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Question

We are a software company that went in partnership with another company to build a software to run and manage festivals. In return, we got an equity from that other company. Afterwards, we realized that most of the revenue is coming from the sale of alcoholic beverages. I have two related questions: 1. Is it okay to own an equity in the festival management company? What if that company got acquired? Is our share halal in this situation? 2. We decided that we will only accept revenue from non-alcoholic sales and discard all other revenue. Assuming that they owe us $100 where $60 is coming from alcohol and the rest is coming from other sales (Tickets, Food, Clothes...). Is it halal to accept the $40? May Allaah reward you.

Answer

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah and that Muhammad  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) is His slave and Messenger.

It is incumbent on you to terminate the partnership with the company in reference as long as it engages in selling alcoholic beverages because the share that you own is considered an unidentified part of the company's capital and the shareholder legally owns part of the assets and thus is a partner and responsible for the company's activities and transactions, lawful or prohibited.

The resolution of the Islamic Fiqh Academy (affiliate to the Organization of the Islamic Conference) reads, "In principle, it is prohibited to buy shares in companies that occasionally deal in prohibited activities such as interest even if its basic activities are lawful." [End of quote]

There is no harm on you to take back your capital and avail yourselves of the profits that you gained in proportion to the lawful activities that the company undertakes. The rest should be disposed of by offering it to the poor and needy or for the general benefit of the Muslims.

Ibn ʻUthaymeen  may  Allaah  have  mercy  upon  him said, "When the profits are gained, if the report shows the sources of these profits, then you take the lawful only and dispose of the unlawful by spending it in charity. However, if the report does not specify the sources, then it is more cautious to spend half of these profits in charity and take the rest because this is what is within your ability to do; Allaah, The Exalted, says (what means): {So fear Allaah as much as you are able} [Quran 64:16]." [Fataawa ʻUlmaa' Al-Balad Al-Haraam]

For more information, please refer to fataawa 90112 and 95512.

Allaah knows best.

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