Ruling on selling shares by instalments whilst leaving them in the name of the original owner
Question I want to sell shares by instalments to one of my colleagues. For example, I have 100 shares in a company, which I bought for 50 riyals and now they are worth 40 riyals. Is it permissible to sell them for 60 riyals by instalments? Please note that the shares are in my personal…
Question
Praise be to Allah.
There is nothing wrong with selling permissible shares by
instalments, such as if the value of the shares is 40 riyals and you sell
them for 60. It does not matter if the shares remain in your name, but you
should document the sale in such a way that will protect the rights of both
the seller and buyer.
Dr. Muhammad al-‘Usaymi (may Allaah preserve him) was asked:
Is it permissible to sell shares that are in my portfolio to a young man,
giving him the freedom to choose the time of sale or to leave them in the
portfolio?
He replied: it is permissible in principle, but I do not
advise it, because of the likelihood of conflict and dispute between you and
him, and of the sale not being documented in the event of death, and of the
buyer not being able to acquire what he bought. But if you do that, the
buyer should not sell to anyone, because he can never transfer them to his
portfolio. Rather he has to ask you to sell them in the market at the time
that he wants. End quote.
From the shaykh’s website.
And Allaah knows best.
