Which takes precedence when distributing profits: paying off the company's debts to shareholders or compensating for capital loss?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
A joint-stock company is a limited partnership (sharikat inan), and its capital is divided into equal shares. It differs from a regular limited partnership in the partners' liability and the irrevocability of its dissolution. Profits are not finally distributed until the capital is recovered and debts are deducted. Profits may be distributed at agreed-upon intervals after evaluating the debts, or without deducting them. The ratio of loss must be commensurate with the ratio of capital contribution.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/180887
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- Ftawy
- Original fatwa ID
- 180887
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- . This is when the answer was added to El Fatwa, not the fatwa's date.
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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- Read the full answer on Ftawy