Is it permissible to consider the amounts owed to merchants by the company owner, which remain outstanding for a full year, as capital for him to earn profits from in Mudarabah contracts, and if so, is Zakat obligatory on these amounts and their profits?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
It is permissible to count debts as personal shares in a company under certain conditions: that the debts are personal and not for the company, and that the loan is under your guarantee, not the company's guarantee, because the Prophet forbade profit from what is not guaranteed. Furthermore, the company's cash funds should not be sufficient to absorb them, and the partners' agreement should not prevent an increase in capital except with their permission. The correct view is that debt does not prevent , so Zakat on trade goods is obligatory on both capital and profits after the passage of a full year (hawl).
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/17367
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- Ftawy
- Original fatwa ID
- 17367
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- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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- Read the full answer on Ftawy