The Official Website of the Office of His Eminence Al-Sayyid Ali Al-Husseini Al-Sistani

Question & Answer » Modharabah (Sleeping partnership)

1 Question: What is Mozarebah?
Answer: Mudharebah is a kind of contract and agreement between two persons in which one person gives a property to the other to do business with that and the proceeds are divided according to their agreement. The one who gives the capital is owner (Malik) and the other one who does business and trading is called agent or Amil.
2 Question: Some trading and manufacturing companies get loans from private or state banks in Muslim countries and also from other [non-Muslim] institutions with the condition of interest; and they also earn interest on the deposits they leave in those banks.
Are we allowed to buy shares from these companies or be partners in their ventures?
Answer: If the partnership with them is like participating in their interest-bearing activities, it is not allowed. However, if Muslims own the company and it receives interest from the banks of non-Muslims, there is no problem [in buying its shares or partnership] from this perspective.
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