Merging a Partnership
Q: Please advise in the following matter.
Preamble:
1. Zaid, Amr and Khalid are equal partners in COMPANY A i.e. each one is a shareholder of 1/3 of COMPANY A.
2. Zaid and Amr are partners in COMPANY B. Zaid owns 75% and Amr 25%
3. Both companies have their own assets and liabilities including debtors and creditors
4. Zaid, Amr and Khalid have agreed to merge COMPANY A and B.
5. The agreement has been that in the new merged company “COMPANY AB” the shareholdings will be as follows:
a) Khalid 10%
b) Amr 27%
c) The balance of 63% will be owned by Zaid
6. When the merger takes place, then Zaid, the majority shareholder, wants to simultaneously sell 30% of his portion to his three sons in equal proportions for a nominal sum (R100 per 10%). Thus, each of his three sons will also own 10% each of COMPANY AB. Consequently, Zaid will only own 33% of COMPANY AB.
Questions:
1. What is the correct procedure to give effect to the merger, keeping in mind that both are major running companies?
2. How does Zaid sell off his shares to his sons and incorporate them into COMPANY AB?
3. How will the creditors and debtors be handled in both instances: (a) In merging COMPANY A and COMPANY B. (b) When Zaid sells off 10% each to three sons for a nominal value of R100 per share?
4. If, at the time of entering into the partnership, the condition was made that a partner should accept liability of a certain portion of the previous companies’ debts together with his capital investment, will this be permissible in Shari’ah?
A: Before addressing the issues in question, it is fundamentally important that certain basic laws of shirkat (partnership) be understood:
1. Contracting a shirkat (partnership) between two or more people is permissible provided:
a) Each partner invests capital.
b) The profit ratio is mutually agreed upon at the onset.
2. It should be borne in mind that it is not a precondition for the validity of the shirkat (partnership) that the profit-sharing be in proportion to the capital investment. Rather, if a partner’s total investment is 30%, he can receive more or less (e.g. 50% or 20%) of the profits, provided this is done with mutual agreement.
3. In a running partnership, it is incorrect for any partner to independently contract a partnership (in the same company) with any outside party without the consent of the other partners.
4. If all the partners invested capital but some are actively involved in the running of the business and some are sleeping partners then it is a condition that the active partner’s share of the profit should not be less than his share of the capital investment. It can be equal to his capital investment or more (in this case, the partnership will follow the laws of mudhaarabah).
As far as merging both companies are concerned, it could be accomplished through the following method:
Terminating the partnership in both companies and thereafter re-contracting a new partnership with new shareholdings. The Shar’ee procedure in effecting this is as follows:
Zaid, Amr and Khalid should verbally terminate their partnership in COMPANY A. Similarly, Zaid and Amr should both verbally terminate their partnership in COMPANY B. After terminating the partnership of both companies, the three of them should evaluate their respective shares, Zaid and Amr in both companies combined and Khalid in COMPANY A. Thereafter, each one’s total share value will serve as capital to re-start the new partnership in COMPANY AB and the shareholding of the new company will be as stated in your question i.e. Khalid 10%, Amr 27% and Zaid 63%. With the consent of Amr and Khalid, it will be permissible for Zaid to sell 10% of his shares to each son for a nominal amount of R100 each.
As far as the companies’ creditors and debtors are concerned, prior to recommencing the new partnership of COMPANY AB, each partner will be responsible for the previous companies’ debts in proportion to his respective share, and each partner will be entitled to receive from the debtors in proportion to his respective share. In Shari’ah, a partner cannot be held responsible for debts that he did not incur nor can he be held liable for debts that he incurred (in partnership) more than his proportionate share of investment. Hence, if at the time of contracting a partnership, the condition is made that in order for one to become a shareholder, he will have to accept liability for a certain amount of the previous debts (which were not incurred by him) then this condition is invalid and impermissible.
Thus, it is necessary, at the time of commencing the partnership in the new company (COMPANY AB), that detailed records of the previous companies’ creditors and debtors be kept separately from the new company, AB’s creditors and debtors, so as to avoid confusion, mismanagement and paying one’s creditors with monies that are due to someone else (the new partners).
If this is not practical then the creditors of the previous companies can be paid out from the new company (COMPANY AB). However, a record of the total amount paid should be kept and at the time of distributing the profits, each partner’s previous debts should be deducted from his share of the profits.
If this is also difficult, then another alternative is that at the time of contracting the partnership, the issue of a certain partner paying a certain percentage of the past company’s creditors should not be made a condition. Instead, the amount should be incorporated in the amount he is asked to pay to become a partner. In this case, a portion of the amount will go as the capital which will be invested in the new company and the balance will be owned by the other shareholders which will be paid on their behalf to their creditors. For example, if the actual amount is R10 000 and the debts are R5000 then the amount that the new partner should be asked to pay as his contribution will be R15 000. The money will now belong to the other shareholders proportionately and it can be used to pay out the debts immediately or reinvested in the company and thereafter used to pay out the debts over a period of time from the business. In this way, the partnership will be permissible and it will not affect the running of the business in any way.
And Allah Ta'ala (الله تعالى) knows best.
(وتبطل الشركة) أي شركة العقد (بموت أحدهما) علم الآخر أو لا لأنه عزل حكمي (ولو حكما) بأن قضى بلحاقه مرتدا (و) تبطل أيضا (بإنكارها) وبقوله لا أعمل معك فتح (وبفسخ أحدهما) ولو المال عروضا بخلاف المضاربة (الدر المختار 4/327)
أما شركة العقود فأنواع ثلاثة شركة بالمال وشركة بالأعمال وكل ذلك على وجهين مفاوضة وعنان كذا في الذخيرة وركنها الإيجاب والقبول وهو أن يقول أحدهما شاركتك في كذا وكذا ويقول الآخر قبلت كذا في الكافي ويندب الإشهاد عليها كذا في النهر الفائق وشرط جواز هذه الشركات كون المعقود عليه عقد الشركة قابلا للوكالة كذا في المحيط وأن يكون الربح معلوم القدر فإن كان مجهولا تفسد الشركة وأن يكون الربح جزءا شائعا في الجملة لا معينا فإن عينا عشرة أو مائة أو نحو ذلك كانت الشركة فاسدة كذا في البدائع (الفتاوى الهندية 2/301)
وفي النهر اعلم أنهما إذا شرطا العمل عليهما إن تساويا مالا وتفاوتا ربحا جاز عند علمائنا الثلاثة خلافا لزفر والربح بينهما على ما شرطا وإن عمل أحدهما فقط وإن شرطاه على أحدهما فإن شرطا الربح بينهما بقدر رأس مالهما جاز ويكون مال الذي لا عمل له بضاعة عند العامل له ربحه وعليه وضيعته وإن شرطا الربح للعامل أكثر من رأس ماله جاز أيضا على الشرط ويكون مال الدافع عند العامل مضاربة ولو شرطا الربح للدافع أكثر من رأس ماله لا يصح الشرط ويكون مال الدافع عند العامل بضاعة لكل واحد منهما ربح ماله والوضيعة بينهما على قدر رأس مالهما أبدا هذا حاصل ما في العناية اهـ ما في النهر
قلت : وحاصل ذلك كله أنه إذا تفاضلا في الربح فإن شرطا العمل عليهما سوية جاز ولو تبرع أحدهما بالعمل وكذا لو شرطا العمل على أحدهما وكان الربح للعامل بقدر رأس ماله أو أكثر ولو كان الأكثر لغير العامل أو لأقلهما عملا لا يصح وله ربح ماله فقط وهذا إذا كان العمل مشروطا كما يفيده قوله إذا شرطا العمل عليهما الخ فلا ينافي ما ذكره الزيلعي في كتاب المضاربة من أنه إذا أراد رب المال أن يجعل المال مضمونا على المضارب أقرضه كله إلا درهما منه وسلمه إليه وعقد شركة العنان ثم يدفع إليه الدرهم ويعمل فيه المستقرض فإن ربح كان بينهما على ما شرطا وإن هلك هلك عليه اهـ ورأيت مثله في آخر مبسوط السرخسي ووجه عدم المنافاة أن العمل هنا لم يشرط على أحد في عقد الشركة بل تبرع به المستقرض فيجوز لصاحب الدرهم الواحد أن يأخذ من الربح بقدر ما شرط من نصف أو أكثر أو أقل وإن لم يكن عاملا ويؤيد هذا التوفيق ما ذكره في البحر قبيل كتاب الكفالة في بحث ما لا يبطل بالشرط الفاسد حيث قال ما نصه قوله والشركة بأن قال شاركتك على أن تهديني كذا ومن هذا القبيل ما في شركة البزازية لو شرطا العمل على أكثرهما مالا والربح بينهما نصفين لم يجز الشرط والربح بينهما أثلاثا اهـ (رد المحتار 4/312)
ولا يملك الشريك الشركة إلا بإذن شريكه جوهرة وقال فى الشامية قوله (لا يملك الشريك) أي شريك العنان بقرينة قوله أما المفاوضة الخ وفي الخانية من فصل العنان ولو شارك أحدهما شركة عنان فما اشتراه الشريك الثالث كان نصفه له ونصفه بين الشريكين وما اشتراه الذي لم يشارك فهو بينه وبين شريكه نصفين ولا شيء منه للشريك الثالث اهـ ومثله في الولوالجية (رد المحتار 4/317)
(الباب الثالث في شركة العنان وفيه ثلاثة فصول) ... وليس له أن يشارك غيره إذا لم يشترط في عقد الشركة أن يعمل كل واحد منهما برأيه نصا وهو الصحيح، كذا في الذخيرة. ولو شارك أحدهما رجلا شركة عنان فما اشتراه الشريك الثالث كان النصف للمشتري ونصفه بين الشريكين الأولين وما اشترى الشريك الذي لم يشارك فهو بينه وبين شريكه نصفين ولا شيء منه للشريك الثالث، كذا في فتاوى قاضي خان (الفتاوي الهندية 2/322)
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