Subject : Islamic Ruling on the Rental of Commercial Registrations and Licenses

Fatwa Number : 3542

Date : 06-11-2019

Classified : Current Financial Issues

Fatwa Type : Search Fatawaa

Question :

I have to enter into a consortium with a major construction company to work in joint projects where my company does the work and provides the funding. However, the other company requested a fixed percentage from the value of every project to be registered in its name. I told them that such a thing could be impermissible from the perspective of Sharia. As a result, I registered (5%) for them as a fixed percentage from the profits of every project. Nevertheless, they refused and requested that I register (2%) from the total value of every project regardless of the amount of profit. Is it permissible for a partner who contributed neither in the funding nor in the work to take a percentage from the value of a project regardless of the profit and loss?

The Answer :

Praise be to Allah the Lord of the Worlds.

It is forbidden to lease commercial registrations and licenses for investment purposes, because this could entail multiple violations and, in case of negligence, all parties involved could be held accountable before the law.

In conclusion, legal terms set for preserving the common good must be adhered to. It isn`t permissible for the one who doesn`t have the required licenses and commercial registrations to resort to fraud to enter into some projects, which set special conditions, such as the consortium of companies. This is because Allah the Almighty says, " O ye who believe! Fear God and be with those who are true (in word and deed)."{At-Tawbah, 119}. In addition, The Messenger of Allah (PBUH) said, "He who cheats us is none of us."{Muslim}. And Allah the Almighty knows best.

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