تصفح برقم المجلد > Group 1 > Volume 14: Transactions 2 > Chapter on partnership > Assigning a fixed percentage of the profits to be distributed among shareholders

Assigning a fixed percentage of the profits to be distributed among shareholders

The third question of Fatwa no. 6419
Q 3: Firms that are now established in Saudi Arabia such as cattle companies and agricultural banks, distribute the profits as following:
(Part No. 14; Page No. 291)
5% as a premium for the company's administration, 15% as reserves, not less than 5% to be distributed among the shareholders as a down payment. Reserves are to be left out once they reach 50% of the company's capital. The question now is: Is the distribution of profits done in this way considered Riba (usury) since the percentage of profit is specified not be not less than 5%? Whereas, these firms may distribute more than 5%. What is the ruling on their specifying the percentage of profit to be not less than 5%?
A: It is permissible to specify part of the profits to be distributed among all the shareholders namely 10 % and 5% and this has nothing to do with the unlawful specification of profit. May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.

The Permanent Committee for Scholarly Research and Ifta'

Member Member Deputy Chairman Chairman
`Abdullah ibn Qa`ud `Abdullah ibn Ghudayyan `Abdul-Razzaq `Afify `Abdul-`Aziz ibn `Abdullah ibn Baz



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