Wednesday 8 Shawwal 1445 - 17 April 2024

Ruling on selling land to a company and in return for payment in the form of shares in that company


My brothers, cousins and I have a family savings fund and we wanted to form a company to deal in land. They opened it (the company) to anyone who wants to invest in the company who is already a member of the savings fund, so that the fund will be a separate entity, and if anyone wants to contribute something extra, according to his ability, those shares will be only in his name. I have some land that they want to buy from me and give me in return all or part of its price in the form of shares. What is the ruling on selling the land in this manner to this company, and taking the price in the form of shares?.


Praise be to Allah.

There is nothing wrong with what you have mentioned of making the family savings fund a separate entity within the company and adding the profits to it. 

And there is nothing wrong with your selling the land to the company and taking all or part of the price in the form of shares, because the company can buy whatever land it wants, even if it belongs to a member of the company, and you can buy shares with whatever wealth you have, whether that comes from selling the land or otherwise. 

And Allah knows best.

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Source: Islam Q&A