Zakaath, - Dought& clear, - How to work out the zakaah for commercial companies

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How do we work out the zakaah for commercial companies?.
Praise be to Allaah.
How to work out the zakaah for commercial companies that have in their possession goods in which they deal: the value of the goods that the company has – i.e., the items that have been bought with the aim of selling them – is worked out at the end of the year on the basis of the value for which they are to be sold. Then we add to that the cash that the company has in hand or in bank accounts, and debts that are owed to it by people which it is hoped will be paid off. Then from all of that one quarter of one tenth (2.5%) is paid.
If the company does not have goods in which it deals, but it undertakes projects for which it earns money, such as developing land, building homes to rent them out and not to sell, or maintenance work, then at the end of the year it should look at the money that it has and debts that are owed to it by others and that it hopes will be paid off, and it should pay one quarter of one tenth of that amount.
As for the buildings, offices, cars, furniture and equipment that are not intended for sale, rather they are used by the company, no zakaah is due on them, no matter how high their value.
And Allaah knows best.

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Zakaath, - Dought& clear, - Zakaah on shares in a company that has not yet been launched for four years

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I am a shareholder in a company that has not yet been launched. After nearly 4 years, the company was dissolved and they returned the capital to the shareholders with a shortfall, meaning: my share was 240,000 and they gave me back 220,000. Is zakaah due on it?.
Praise be to Allaah.
The basic principle with regard to zakaah on shares is that if the company did not pay zakaah on its wealth for any reason, then the shareholders are obliged to pay zakaah on their wealth. If the shareholder can find out from the company's accounts about his shares and whether the company paid zakaah on its shares in the manner referred to, he should pay zakaah on his shares on that basis, because it is the basic principle with regard to the way in which zakaah on shares is to be paid.
If the shareholder cannot find that out:
If he bought shares in the company with the aim of benefitting from the annual dividend on the shares and not with the aim of trading in them, then the owner of these shares does not have to pay zakaah on the share itself; rather he has to pay zakaah on the dividend, at a rate of one quarter of one tenth after one year has passed from the day on which he took possession of the dividend.
If the shareholder bought the shares with the aim of trading in them, then he must pay the zakaah of trade goods on them. When one year has passed since they came into his possession, he must pay zakaah on their market value; if there is no market for them, he must pay zakaah on their value as estimated by experts, paying 2.5% of this value and of any profit, if the shares made any profit. End quote fromMajallat Majma’ al-Fiqh al-Islami, 1/879
If there is a problem with these shares and their owner cannot dispose of them, then he should pay zakaah once, at the time of selling them or recouping their value.
Dr. Muhammad al-‘Usaymi (may Allah preserve him) was asked: O Shaykh, may Allah bless you and reward you with good, you know that there was a problem between the al-Duraybi real estate company and the government, and the shares were frozen for five years, to the point that we almost despaired, but now Allah has made things easy, and the money of the shareholders has been paid back. Does zakaah have to be paid on it? For how many years should zakaah be paid on it?
He replied: Yes, you have to pay zakaah for one year. And Allah knows best.
And Allah knows best.

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Zakaath, - Dought& clear, - If a person buys land in order to protect his wealth, does he have to pay zakaah when one year has passed?

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There is a man who bought a piece of land, not with the intention of trading it; rather his intention in buying it was to protect his wealth and keep it from being lost, and when he needs the money he will sell it. Is zakaah due on it or not?.
Praise be to Allaah.
If a person buys land and does not intend to trade in it; rather his aim is to protect his wealth or some other reason, then he is not obliged to pay zakaah on the land even if it remains like this with him for ten years, because he did not intend to trade in it, and because of the report narrated by Ibn ‘Umar (may Allah be pleased with him) who said: “There is no zakaah on goods unless they are for trade.” Narrated by al-Bayhaqi and classed as saheeh by al-Nawawi inal-Majmoo‘(6/5). Also classed as saheeh by al-Haafiz ibn Hajar (may Allah have mercy on him) inal-Diraayah, 1/261.
Al-Bahooti said inSharh Muntaha’l-Iraadaat, 1/434:
“Goods” refers to that which is prepared for buying and selling in order to make a profit, even if it is currency. End quote.
Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said:
“Trade goods” refers to that which a person prepares for the purpose of making money. Any kind of wealth that a person prepares for making money is regarded as trade goods, whether it is livestock, crops, grains, cars, machines or anything else. Hence you find a merchant offering an item and selling it in the evening, because he does not want the item in and of itself; rather the aim is to make a profit. So everything that is prepared for the purpose of making money is trade goods.
End quote fromSharh al-Kaafi.
He also said: Trade goods are kinds of wealth that a person prepares for business, i.e., he has no aim other than trading in them.
End quote fromLiqa’ al-Baab al-Maftooh, 78.
He was asked about one who puts his wealth in land, not intending to trade in it or build on it or cultivate it; rather he says, It is to protect my wealth, and if I need it (the money), I will sell it. Is zakaah due on that?
He replied:
No zakaah is due on it. Some of the fuqaha’ even say that if he buys real estate with his money so as to evade zakaah, no zakaah is due on it! But this is like cheating [thus zakaah remains obligatory for him]. End quote fromThamaraat al-Tadween.
And Allah knows best.

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Zakaath, - Dought& clear, - He has a pharmacy and one full year has passed since he acquired it; how should he pay zakaah on it?

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My brother owns a pharmacy and one year has passed. Is zakaah due on the medicines and other necessities in the pharmacy?.
Praise be to Allaah.
Zakaah is due on trade goods, subject to two conditions:
1. That the minimum threshold (nisaab) has been reached;
2. That one full year has passed since it was acquired, because the Prophet (blessings and peace of Allah be upon him) said: “There is no zakaah on wealth until one year has passed (since it was acquired).” Narrated by al-Tirmidhi (632) and Ibn Maajah (1792); classed as saheeh by al-Albaani (may Allah have mercy on him).
Zakaah on trade goods must be paid on everything that is prepared for sale and dealing. That includes the medicines in the pharmacy and all other necessities that are sold there. As for things that are not for sale, no zakaah is due on them, such as furnishings, equipment (e.g. air conditioners and computers) and so on.
For more information please see the answer to question no. 50726.
Based on that, your brother has to evaluate the items that are sold in the pharmacy when one year has passed since he acquired the wealth with which he bought them, at the end of the year. Then he should add to that the profits made by the pharmacy that he still has, then he should pay zakaah on the total amount, at a rate of 2.5%.
It should be noted that the year in the case of trade goods starts from the time one took possession of the money with which those goods were bought, not from the date they were bought.
And Allah knows best.

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