Is it permissible in Sharia to allocate 70% of the net profit to be distributed to capital, 20% for management, and 10% for reserves that are distributed only to the founders at the end of the company's life?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
Establishing a company in this manner is permissible and is called a partnership. However, the aforementioned reserve fund must be distributed among all shareholders, each according to their share. The founders should not exclusively benefit from it, unless an agreement is reached with the rest of the shareholders to distribute it among the founders at the end of the company’s term; in that case, there is no harm.
Summarized from the full answer at Ftawy · imported
Read the full answer on Ftawyhttps://ftawy.com/en/questions/37685
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- Ftawy
- Original fatwa ID
- 37685
- Imported
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