Holding back a portion of the profits in an investment

Q: Generally, in certain property or livestock investments, they have a reserve which they keep for expenses and unexpected circumstances. In other words, they don’t distribute this money to the shareholders as dividends. Is this permissible?


A: With the consent of the shareholders, it is permissible. However, it should be remembered that if any partner sells his share, his proportionate amount of the wealth held back in reserve should be given to him.

And Allah Ta'ala (الله تعالى) knows best.

حدثنا كثير بن عبد الله بن عمرو بن عوف المزني عن أبيه عن جده أن رسول الله صلى الله عليه وسلم قال الصلح جائز بين المسلمين إلا صلحا حرم حلالا أو أحل حراما والمسلمون على شروطهم إلا شرطا حرم حلالا أو أحل حراما هذا حديث حسن صحيح (سنن الترمذي، الرقم: 1352)

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)