Reference no: EM132953613
1. Shares represent units of ownership interest or a specificpart of the total capital of a company.
a. By purchasing shares in a company a person does not become a shareholder or partner in a business
b. By purchasing shares in a company a person becomes a shareholder or partner in a business.
2. The main concern relates to the type of industry the company is involved in. The general rule is that most business activities are permitted (halal) unless specifically prohibited by the Shariah.
A. The reason, if the main business of the company is not halal (permissible) and Shariah prohibitions are avoided (e.g. Riba), then shares of such a company are not also permissible.
B. The reason, if the main business of the company is halal (permissible) and Shariah prohibitions are avoided (e.g. Riba), then shares of such a company are also permissible.
3. Commodity Murabaha is equal to Tawarruq but the commodity typically represent metals (excluding gold and silver), that is listed on, for instance, the London Metal Exchange.
a.It is not used for short term financing.
b. It is used for short term financing.
4. Tawarruq (or reverse Murabaha) is when a party in need of cash purchases a commodity on deferred basis, then sells it on the spot for cash. (seeking cash/liquidity, selling a specific commodity)
a.Indirect receive
b.direct receive
c.deferred basis
5. Islamic Investment fund works on a partnership basis, where investors jointly pool surplus money for investment purposes. The subscribers of the Fund receive certificates or shares.
a.Business purposes
b.Advance purposes
c.investment purposes
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