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The question

What is the ruling on the annual return provided by cooperative societies to shareholders if they call it interest on the contributed capital?

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Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 20261 min readAlso available in العربية
The answer

The summary of the answer: These companies sell consumer goods and distribute a portion of their profits to shareholders. These funds are permissible, and the name does not affect their ruling as long as the shareholding is legitimate. The default ruling for transactions is permissibility. One should avoid using the term "interest" (fāʾidah) because it has become a technical term for usurious capital gains.

Summarized from the full answer at Ftawy · imported

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Source platform
Ftawy
Original fatwa ID
31823
Imported
Translation status
Source text, unreviewed
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