In this article we demonstrate how the mind is used to study the nature of an issue(Stock Companies) and how the text is used to determine whether Stock companies are valid or invalid.Please note the differences between the role of mind and Divine Text.Divine Text is taken as the source of solution and reality is the subject of  enquiry. Reality is not to be taken as the source of solution.

 Western legislation emanates from a corrupt creed which views every thing(even life) from the angle of benefit and freedom.Islamic legislation emanates from a comprehensive outlook towards life, universe and humankind(i.e.acceptance of the Creator). This is the reality of the Islamic legislation, and that is the reality of the Western legislation. This is the huge difference between both legislations: between a legislation built on a false speculative basis which gives corrupt solutions, and a legislation built on a true definite basis which gives correct solutions. Rather, they are deemed to be the only true solutions. However, what really happened was that the Western legislation blatantly challenged the Islamic legislation, and as a consequence of this challenge the Muslims were defeated. Then the result of this loss was that the Muslims were completely defeated politically and utterly fragmented. A person is taken completely by surprise and bewilderment when he comprehends the falseness of the Western legislation and its inability to face the problems of human beings. Then he comprehends the correctness of the Islamic legislation and its ability to face every problem presented to man and solves it correctly. Yet he sees the defeat of the Muslims, the followers of the true ideology, before the challenge of the false ideology.

When the Muslims were bombarded by the Western legislation, which challenged the system of Islam with the Capitalist system, they were baffled by the great industrial revolution that took place in the West. Thus, they were driven to respond to this challenge on the erroneous basis that the Westerners set down for them, which is that the Western system solves problems with such and such solution and Islam does not have the same solution. In their minds, Muslims linked the solution of Capitalism to problems related to the greatness of the inventions and industries and they sought the solution to this problem in Islam in the same way that the Western legislation had solved it. Here is where a flaw occurred in their study and thinking. Due to this, their confidence in the Ahkam of Islam was dealt a severe blow, whose solutions differ from the solutions derived from the Ahkam of the West and its legislation!
 

Indeed, the Islamic legislation emanates from the belief in Allah, His Messengers, Books, Angels and the Day of Judgement. In other words, it emanates from the Qur'an and Sunnah that have been decisively proven to be revelation from Allah. Whatever is understood from the Qur'an and Sunnah in terms of the comprehensive evidences , general principles, Shar’i definitions, collective rules  or partial rules , all constitute Islamic legislation. Any situations that arise are submitted to these constituents of the Islamic legislation and their rules are deduced for them. As for the new issues, particularly those that do not occur except in the Capitalist society, when Islam is attacked with them by saying that it did not have solutions to them, the reality of the problem must be understood and not its specific rule. When the reality is understood then what is in the Sharee’ah in terms of texts, principles, definitions and rules are applied on this reality and the Islamic opinion is given regarding it. As for a specific rule, one does not questions whether it is right or wrong. One does not ask whether the Islamic Sharee’ah agrees with what the Capitalist system says about share companies, insurance, foreign trade and banks etc. Rather, what one seeks is the opinion of the Sharee’ah regarding these incidents. If the Sharee’ah gives its opinion regarding every new issue then it is a complete Sharee’ah irrespective of whether this opinion agrees or disagrees with what the Capitalist system has said. However, the Muslims did not highlight the corruption of the Western legislation so as to directly focus on the corruption of the rules of the Capitalist system. Rather, in their minds they linked its solutions with the greatness of the inventions and industries in the West. Similarly, they did not clarify that the issue at hand was the rule of Islam on the reality of the problem, and not making Islam run in accordance with Western legislation. Thus they began to search in Islam for an opinion that agrees with the Western system or at least does not disagree with it, so as to prove that Islam is suitable for the age.

This approach caused the shocking loss. For example, when Muslims were asked about share companies, they should not have considered whether Islam is able to say what the Capitalist system says about share companies, in a vain attempt to be considered good enough to keep up with the age. Rather the Muslims should have asked what the opinion of Islam is regarding share companies. Then the answer would have been that the reality of the problem in a share company is that it is a company formed by partners who are unknown to the public. The founders of a share company are all those who have signed the initial contract of the company. Subscription in the company is undertaken by the obligation of the person to buy one or more shares in the proposed company in return for their nominal value. The contract of the share company takes place in one of two ways. In the first instance, the shares of the company are restricted to the founders who distribute them amongst themselves without offering them to the public. Signing the constitution that structures the company and includes the conditions upon which the company proceeds does this. Everyone who signs the constitution is considered a founder and a partner, and once they all have signed, the company is founded. The second way of subscription is where a few people found the company and draft its constitution containing the company conditions. The shares are then offered to the public for general subscription in the company; and when the time of subscription expires, the founding assembly of the company will meet and elect a board to run the company and the company will start its work. This company i.e. the joint-stock company is considered in the Capitalist system as being the actions of one party i.e. from a single individual and not from two persons. It is defined as the action of solitary will, and this explains why the Capitalists say that the formation of the share stock company is a type of solitary will action. Generally, the contract is viewed as an agreement of two wills, and certain transactions such as sale and lease are classified as contract. Besides the contract, there is also the solitary will, which is a specific commitment made by an individual like the formation of share-stock company, a co-operative and bequest.

The partner in a share-stock company makes a commitment on his part to buy a certain amount of shares and pays a certain price to acquire these shares, regardless of the acceptance or refusal of the other partners, and regardless of their happiness or anger. Once he has signed the contract or bought the shares and so on, he becomes a partner in that company. Thus, the shares in a share-stock company are put on sale like bonds and premiums and are put in circulation like the currency banknotes. So once the purchaser has paid the price required for the shares he becomes a partner in the company. The Western Capitalists defined the share-stock companies as "a contract between two people in which both agree to take part in an economic or financial project by providing a share of the Capital so as to divide between them whatever accrues from this project in terms of profit or loss." This is the reality of the share-stock company. Examining this type of company in light of Islamic legislation shows that it is an invalid company, and that it is not permitted to take part in it because any invalid transaction is Haram. This illegality comes from the fact that Islamic legislation has determined the reality of the company, its structure and its rules. The definition of a company in Islam is that it is 'a contract between two or more people who agree to undertake economic or financial work for the purpose of (gaining) profit.' Legally this is an action that occurs between two people and not an action that can originate from one individual. So a company as it stands is a contract, whatever the type or nature of the company. In Islam the contract requires the presence of both the offer and the acceptance of the offer in one session. There must be two parties in the contract. One party assumes the responsibility for the offer by making the offer for example "I gave to you in marriage…" or "I sold to you…" or "I offered to employ you…" or "I participated with you…" and so on.

The other party undertakes the acceptance by saying "I accepted this…" or "I agreed to this…" and so on. If the contract does not include the two parties or there is no mention of offer and acceptance, then it cannot be (legally) convened and the contract would be invalid (Baatil). In the Sharee’ah there is no difference between the contract for sale and the company structure. The share-stock company is one set up under Western legislation, and it is considered as an action relating to solitary will and not like the contract for sale. So it does not contain two parties. Rather the company consists of one party or group that has committed itself with something and has not committed itself to this thing with another group or party. Islamic legislation considers the company structure to be like the contract for sale, contract for leasing, representation (Wakalah) and so on. It does not consider it to be similar to actions of charitable endowment (Waqf), bequests (Wasiyyah), the offering of incentives and the giving of prizes and so on. Therefore, the share-stock company is legally invalid and has no basis in Islam. In this issue, the reality of the question was applied to the divine (Shar’i) definition and its opinion was given from this basis and the ruling of Islam on this matter was given. The divine definition, of course is taken from the Shar’i texts. The nature of the company structure was decided by the Messenger of Allah , it had two partners and was convened by an offer and an acceptance. Al-Bara'a bin 'Aazib and Zayd bin Arqam were (two) partners, so they bought silver with cash and on credit. This news reached the Messenger of Allah and he said to them

"that (part) which was in cash, allow it, and that (part) which was in credit, return it back."

It was also narrated from the Prophet that he said

"Allah said 'I am the third of the two partners as long as neither of them betrayed his companion. If one of them betrayed the other then I would come out from them."'

The Prophet also said:
"the profit is according to the conditions placed by the contractors, and the loss is according to the amount of the property or fund."

It was also reported that the Messenger of Allah  formed an association with Ammar bin Yassir and Sa'ad bin Abi Waqqas. It can be concluded from these examples that a contract in Islam is a contract made between two people and not by the actions of one man; and thus the definition of a company in Islam was established. This is the opinion of Islam regarding the share-stock companies. Regardless of whether or not this opinion agreed with the Capitalist viewpoint on this issue, it has to be acted upon. It is Haram to forge another opinion against Islam, and it is also Haram to act upon a directive different from the Islamic one. What is needed here is the opinion of Islam regarding the share-stock company and not making Islam agree with the opinion of the Capitalists regarding the same issue.

Comments

1.Muslims declined because they abandoned Ijtihad(the process of exerting into the text) to find solutions to the new problems.As a result of this decline in thought(tafkeer) they could not challenge the west in the areas of Science and Technology.This in turn created a severe inferiority complex in the minds of Muslims regarding the Islamic Aqeedah and all the legislations emanating from it.So whenever the Muslims were challenged by the capitalist thought,they began to think that science and technology as something specific to western civilization only.

Further Reading on this subject

1.Rational Thought versus Scientific Thought

2.These were some of the thoughts and rules of Islam that were attacked by Capitalist thoughts and rules. As for the attack on the Islamic Shari’ah, they used the new issues and issues which only exist in the Capitalist society to show that the Shari’ah is unable to solve new problems. The angle of the Western discussion was that they would give the opinion of the Capitalist system regarding a problem and then attack Islam by saying that such an opinion does not exist in Islam nor does it hold such a view. Thus they concluded that Islam has an inflexible legislation that is unable to comply with time and does not give solutions to the problems that exist in every age. It therefore fails to permit usury although the age has come to need it. It is also unable to clarify the rule on insurance despite the fact that the trade and industry that emerged in this age require it. In addition, it cannot explain the trade relations between states according to the requirements of the age. Therefore, it is not fit to be the legislation for a nation or a system for a state in this modern age and in the new ages where there will be new problems and issues that arise with time. This is the basis of discussion that the Westerners lay down and carried the discussion with the Muslims on its foundation and challenged Islam with it. The Muslims proceeded with the discussion on this basis. That is why they became confused, because it was not permitted for the discussion to proceed on this level. Rather, confusion occurred due to the impossibility of carrying out the discussion and keeping it, at the same time, in harmony with its fundamentals and branches. When the basis of discussion differs, then the discussion becomes confused. The basis of discussion here should be as follows: Is the Islamic Shari’ah fit to be a field for thought such that it is possible to deduce all types of relationships between people from its evidences? Does it allow for a wide range of generalisations so that it is possible for the ManTooq (wording) and Mafhoom (meaning) of its evidences to encompass the new and diverse issues, such that the rules of the Shari’ah apply to them? Is it also a fertile soil for generating collective principles and general thoughts? Does it have the capacity to solve the problems of peoples from different backgrounds and nationalities? If this is so, then this Shari’ah is suitable, otherwise it is not. To prove this, the new issues are presented to it and its opinion is sought. Its texts are studied so as to examine the possibility of deducing the rules and principles and the possibility of classifying the various issues under it. This is the basis of discussion. As for requesting the Shari’ah to give opinions advocated by the Capitalist system or that which is prevalent in this age and held by the majority, this is not the basis of discussion, nor is it allowed to be so.
 

This is because the subject is the Sharee’ah's suitability for this and every age and not whether it has the capacity to give a specific opinion. Therefore, the origin of Western legislation and the basis on which it is established is studied. Then one studies whether it is fit to solve the problems of every age and remain consistent with its basis, or it is not fit except by interpretation, manipulation and explanation and deviation from its basis. The Islamic legislation and the basis on which it is established is then studied to see whether it is suitable to solve the problems of every age and remain consistent with its basis, without deviating from that basis. With this the reality of the true legislation is distinguished from the false legislation. Thus, the true legislation is the one whose basis is true by agreeing with the reality and natural disposition (Firah). This basis should be decisive and conclusive and not speculative (DHanni), thus open to the possibility of being right or wrong. As for the fact that it is suitable for all ages, peoples and generations, this is apparent from its ability to give opinions regarding any problem man faces in any time and in any country. In other words, its broad guidelines from which every solution is deduced without deviating from the basis upon which the legislation is based, and without deviating from the broad guidelines themselves from which the solutions emanate. If these conditions are met in legislation then it is suitable for all ages.

The one who examines the Western and Islamic legislations will find that the Western legislation has a false basis, corrupt solutions and cannot give solutions to new problems except by deviating from the basis, disregarding it and giving a solution which has no relationship to it, and in reality contradicts it. The one who examines the Islamic legislation will find that it has a correct basis, which is definite and not speculative. The solutions in this legislation are true and agree with the reality and the natural disposition of human beings. Moreover, it has the capacity to deduce any opinion for any problem without deviating from the basis on which it is established or disregarding the broad guidelines from which the opinion is deduced.Lets take an example to understand the false basis of western legislation.It was the basis of freedom which drives people to do whatever they want(like taking drugs,hedonistic behaviour).But the western Governments are constantly passing legislation to combat this freedom by making some things permissible and  prohibiting others.Passing laws to allow some behaviour (e.g. use of marijuana) and prohibiting some (e.g. use of cocaine) is a blatant deviation of the basis(freedom) on which they established life's problems.

Further Reading

Changing Life perspective and Thinking

The problem

Islamic Personality

Latin Scripts - A Colonial tool