The corpus carries the OIC's rulings on individual contracts, but not on the COMPANY itself — the thing a Muslim actually buys a share of.
The corpus carries the OIC's rulings on individual contracts, but not on the COMPANY itself — the thing a Muslim actually buys a share of. Resolution No. 130 (4/14) 'Shariah Rulings on Modern Companies: Holding and Other Companies' (14th session, Doha, State of Qatar, 11-16 January 2003) is the Academy's settled ruling on the modern company and its shares. It defines the forms a saver meets — joint-stock, limited-liability, holding, multinational — and draws the one test that decides whether their shares are ownable: is the company's MAIN LINE OF BUSINESS lawful? A usury-based bank, or a firm dealing in narcotics, pornography or pigs, is a prohibited company whose shares may be neither owned nor traded. It bars the company from issuing preference shares, jouissance shares or bonds; makes each partner bear loss in proportion to capital; and holds the shareholder to own an undivided share of the company's assets, not a fixed claim.
What this source says
THE THING A SAVER ACTUALLY BUYS. The corpus already carries the Academy's rulings on the individual contracts — murābaḥa, ijārah, salam, istiṣnāʿ. But when a Muslim puts money into a business he rarely buys a contract; he buys a SHARE of a company. Resolution No. 130 (4/14) is the Academy's settled ruling on that company and the share itself: what the modern forms are, when their shares may be owned, and what the ownership actually is. It 'Resolves' across six ordinal heads and carries NO Recommendations section — the subject is decided in the body and signed off, 'Indeed, Allāh is All-Knowing.'
THE MAP FIRST. The first head sorts the forms a saver meets. 'Capital Association Companies' are those built on pooled capital rather than the persons behind it — among them the 'Joint Stock Company: a company with its capital divided into equal tradable shares, and the liability of each of its partners is limited to his share in the capital', and the 'Limited Liability Company: a company with its capital owned by a limited number of partners (number varies under different laws), each has a liability commensurate with his shares in the capital. The shares of this type of company are not tradable.' Against these it sets the 'Personal Association Companies' — the partnerships built on who the partners are and the confidence between them. It then names the two structures a modern portfolio runs into most: the 'Holding Company', 'A company that owns stocks or shares in other independent companies' capital at a ratio that enables it to dominate its management and control its business plans,' and the 'Multinational Company', 'A company that comprises a group of subsidiary companies and has a principal center located in one country, while its subsidiaries are located in different countries'.
THE ONE TEST THAT DECIDES A SHARE. The second head is the line an investor needs. 'In principle, companies are permissible as long as they do not perform Shariah-banned activities.' Then the boundary: 'However, if the main line of business is prohibited, such as usury-based banks or companies that entirely or partially deal in prohibited things such as narcotics, pornography, or pigs, these are prohibited companies, and it is prohibited to own or trade their shares.' The test is the MAIN LINE OF BUSINESS. A conventional bank, whose whole trade is interest, is a prohibited company; so is a firm built on the ḥarām goods named. Own no share of it, trade no share of it — the prohibition reaches ownership and dealing alike.
WHAT THE COMPANY MAY NOT ISSUE. The third head closes an instrument-level door that a screen on the business alone would miss. 'It is prohibited for the company to issue jouissance shares, preference shares, or bonds.' A bond is an interest-bearing loan the corpus already rules out (Res 60); a preference share carries a fixed, priority return that behaves like one; a jouissance share pays a holder whose capital has already been returned. Each cuts across the risk-sharing a real partnership requires — so even a company in a lawful line of business is compromised by issuing them.
WHO CARRIES THE LOSS. The fourth head fixes the downside where Shariah insists it sit. 'In case of capital loss, each partner should bear in proportion to his capital share.' Loss follows capital, pro rata — the same principle that forbids a partner from being promised a fixed return insulated from the venture, drawn here for the company form.
WHAT A SHARE ACTUALLY IS. The fifth head says what the shareholder owns, and it is not a paper claim to a number. 'The shareholder in the company owns a common share in its assets in proportion to his capital share and remains as the owner of that share until ownership title is shifted to someone else through an exit or any other form of ownership transfer.' A share is an undivided slice of the company's real assets, held until it is genuinely transferred to another owner — the ownership fact that makes trading the share a sale of something real rather than a trade in a debt.
AND THE ZAKĀH ON IT. The sixth head does not re-rule what the Academy settled elsewhere; it points. 'As regards the collection of Zakāh on company shares, in cases of holding and multinational companies, refer to resolution no. 28 (3/4) of the 4th Session, and resolution no. 121 (3/13) of the 13th Session of the Academy.' Both of those are in the corpus already — the entry reports the signpost, it does not reproduce their content.
THE HONEST GAP THIS DOES NOT CLOSE. Res 130 settles the MAIN-LINE test. It does NOT settle the harder, and more common, case a Western Muslim investor actually faces — the mixed company: a firm whose main business is lawful but which, incidentally, borrows or deposits on interest. On that precise question the Academy repeatedly DEFERRED — the shares subject was put off at the seventh and eighth sessions (Res 77 (8/8) 'Shareholding in Joint-Stock Companies Dealing with Ribā' commissioning 'further research on the subject to adopt an appropriate resolution in its regard at its next session') and again at the ninth. So the corpus should be read honestly: Res 130 gives the settled principle that a prohibited main line voids the share, but the widely-used incidental-interest screens (the tolerance ratios and purification of tainted income) are NOT an OIC ruling — they are the work of other bodies, and the OIC left that specific question open.
HOW TO CITE IT HONESTLY. Res 130 grades no company and blesses no fund. What it hands a Muslim investor is a first, decisive filter to hold against any share: is the company's main line of business lawful, and does it keep its capital free of the prohibited instruments — preference shares, jouissance shares, bonds — that this resolution names? If the main line is a bank's interest trade or one of the ḥarām goods, the answer is settled and the share is out. Beyond that filter, on the incidental-riba case, the resolution is silent, and no entry should pretend the Academy decided what it deferred.
Wording inside quotation marks is quoted from the source. The rest is this notebook’s summary of it — read the original before relying on it.
Provenance
- Compiled from
- Compiled 2026-07-21 from the International Islamic Fiqh Academy's OWN OFFICIAL ENGLISH text of the resolution. PRIMARY AND SOLE AUTHORITY FOR EVERY VERBATIM SPAN ATTRIBUTED TO RES 130: the IIFA Official Edition (Resolutions and Recommendations of the International Islamic Fiqh Academy, Oct 2021), Resolution No. 130 (4/14). Compiler role limited to selection, translation-faithful quotation and cross-referencing within the corpus; no ruling, figure, scholar, board or product is asserted beyond what the resolution itself states. Every quoted span is machine-verified as an exact substring of the source under a canonical normalisation (build_res130.py, 22/22 spans across three blocks; audit_res130.py re-extracts every quotation from the finished JSON and re-verifies it against the source).
- Source
- PRIMARY TEXT (full title; session, city, country and dates; the 'Resolves' with its six heads — the definitions of the company forms including holding and multinational, the main-line-of-business permissibility test, the ban on jouissance/preference shares and bonds, the pro-rata loss rule, the common-undivided-share ownership rule, and the Zakāh cross-reference to Res 28 and Res 121; and the devotional close). International Islamic Fiqh Academy, Official Edition (Oct 2021). No Recommendations section — the ruling is fully settled in the body. Every verbatim span machine-verified against this source (build_res130.py 22/22; audit_res130.py re-extracts and re-verifies every quotation from the finished JSON). Cross-references (Res 28, Res 121 as Res 130 cites them; Res 60 on bonds and the deferred Res 77 / Res 87 named in the prose as in-corpus signposts) are reported as stated, not reproduced.
- School / basis
- Comparative fiqh al-muʿāmalāt (Shariah rulings on modern company forms and the ownership of shares) with a PRIMARY OIC collective text. Resolution No. 130 (4/14), 14th session (Doha, State of Qatar, 11-16 January 2003). Defines the modern forms (capital-association: joint-stock, limited-shares, limited-liability; personal-association partnerships; holding; multinational) and rules: companies are in principle permissible unless the MAIN LINE of business is prohibited (usury-based banks; entire or partial dealing in narcotics, pornography or pigs), in which case owning or trading their shares is prohibited; a company may not issue jouissance shares, preference shares or bonds; capital loss is borne by each partner in proportion to his share; the shareholder owns a common (undivided) share in the company's assets proportional to capital until ownership is transferred; and Zakāh on shares in holding and multinational companies is referred to Res 28 (3/4) and Res 121 (3/13). The incidental-interest mixed-company case is NOT ruled here — that subject was deferred by the Academy (Res 77 (8/8), Res 87 (4/9)).
- Captured
- 2026-07-21
- Added
- 2026-07-21
- Trust
- Primary or near-primary source with a stable public URL.
Compiler’s note
Added 2026-07-21 (auto-run). The OIC Fiqh Academy's SETTLED ruling on the modern company and its shares — the thing a Muslim saver actually buys, which the corpus (rich on individual contracts) did not yet cover. Chosen by listing content/articles/ and diffing against the source table of contents. Re-checked ON DISK: UNCOVERED (no *resolution-130* file; the corpus held istiṣnāʿ (Res 65), the bond prohibition (Res 60) and mushārakah/muḍārabah partnership entries, but not the Academy's treatment of the company FORM and share ownership), SETTLED (its 'Resolves' rules across SIX ordinal heads First-Sixth; not a deferral; NO Recommendations section, so fully settled rather than merely confined), SUBSTANTIVE (the main-line-of-business share test an investor can hold against any equity). Three settledness gates clean on the primary: 0 keyword, 0 paraphrase, 16 operative units (6 heads + 4 numbered + 6 lettered). Two negative controls, for the first time BOTH the deferred PREDECESSORS of the primary's own subject: (1) Res 77 (8/8) 'Shareholding in Joint-Stock Companies Dealing with Ribā' caught by the PARAPHRASE gate only ('commission further research') though it carries NO deferral KEYWORD — a keyword-invisible deferral of the very shares subject Res 130 later settled the main-line test of; (2) Res 122 (4/13) 'Diminishing Mushārakah in light of Contemporary Contracts' caught by BOTH gates (bare 'Postponement'). HONEST GAP surfaced in the prose: Res 130 settles the MAIN-LINE test, NOT the incidental-interest mixed-company case, which the Academy DEFERRED (Res 77/87) — the tolerance-ratio screens and purification are not an OIC ruling. DROPPED per no-fab: no provider, scheme, scholar, board, figure, rate, fee, threshold, tolerance ratio, statute or regulator; NO scriptural text; cross-referenced resolutions' content NOT reproduced beyond the reference Res 130 itself makes. Articles 130->131 (66 IIFA resolutions); corpus total 228->229. Build/lint green (see punch-list). NEXT candidate: keep diffing content/articles/ against the source TOC for a genuinely UNCOVERED, SETTLED muʿāmalāt resolution — do NOT trust a remembered number. Res 133 (7/14) Problem of Arrears in Islamic Financial Institutions is uncovered and settled but heavily REPRODUCES already-covered Res 51/85/109 quotes (poor no-fab candidate — would need careful span discipline); Res 147 (5/16) International Commodities and their Trading Standards is settled but largely reconfirms the covered Res 63; Res 132 (6/14) Adhesion Contracts is settled and distinct. Verify absence on disk, confirm a real 'Resolves' (not a deferral like Res 77/87/88/89), and RUN ALL THREE SETTLEDNESS GATES before writing. AVOID the whole-subject deferrals already logged (Res 77 (8/8), Res 87 (4/9), Res 122 (4/13), Res 124 (6/13), Res 187 (2/20), Res 188 (3/20)) and Res 237 (8/24) on electronic currencies.
Topics
modern-companiescompany-formsjoint-stock-companylimited-liability-companylimited-shares-companypersonal-association-companiespartnershipholding-companymultinational-companysubsidiarysharesshareholdingshare-ownershipmain-line-of-businessbusiness-screeningprohibited-companiesusury-based-banksharam-goodspreference-sharesjouissance-sharesbondsresolution-60capital-lossprofit-and-loss-sharingpro-rata-losscommon-shareundivided-ownershipcompany-assetsownership-transferzakah-on-sharesresolution-28resolution-121incidental-ribashariah-screeningdeferred-subjectresolution-77resolution-87investingequitiesstock-investingislamic-financefully-settledoic-fiqh-academyiifacollective-ijtihadprimary-textresolution-130
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