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Shari’ah Guidelines for Business

In the present times, the term shari’ah law is synonymous with controversy as people equate it with rigid and harsh rules that make a person’s life disturbingly difficult. While this is the general perspective of the common masses, especially the non-Muslims, the reality of shari’ah law is contradictory to this misconceived perception. Just as every land has its laws, Islam too has its laws that are meant to govern the day-to-day lives of the Muslims. Shari’ah law comprises all such laws which are sourced from the Quran and Sunnah, in addition to other principles endorsed by the Islamic Scholars, namely the Ijma and Qiyaas, that provide rulings on matters that are not directly addressed in the Quran and Sunnah.

Shari’ah law deals with all aspects of human life and provides guidelines for orderly governance. One such important aspect of human life is engaging in business activities that allow halaal income, in a manner that is pleasing to Allah ﷻ.

Honest and Lawful Transactions

Narrated by Abu Hurairah,

“The Messenger of Allah passed by a pile of food. He put his fingers in it and felt wetness. He said, ‘O owner of the food! What is this?’ He replied, ‘It was rained upon, O Messenger of Allah.’ He said, ‘Why not put it on top of the food so the people can see it?’ Then he said: ‘Whoever cheats, he is not one of us.'”

[Jami at-Tirmidhi 1315| Grade- Sahih (Darussalaam)]

Allah ﷻsays,

“O you who have believed, do not consume one another’s wealth unjustly but only (in lawful) business by mutual consent…”

[Al Qur’an 4:29]

Allah ﷻ further says,

“And O my people, give full measure and weight in justice and do not deprive the people of their due and do not commit abuse on the earth, spreading corruption. What remains (lawful) from Allah is best for you, if you would be believers…”

[Al Qur’an 11:85-86]

Islam greatly emphasizes honesty in commercial dealings. Pure intention, honesty and justice are some of the crucial pillars an Islamic society is based on. When dealing in business transactions, it is absolutely prohibited for a believer to indulge in deceitful and fraudulent activities merely to gain more profit. It is a common practice for businessmen to indulge in artifice while dealing with customers and associates to earn extra money than what’s due. It is also extremely important for those engaging in business to follow the legal rules and laws of the land they’re living in, as deceitfully breaking such rules is also prohibited. Unfortunately, many Muslim entrepreneurs indulge in similar practices. However, they do not realize that while these malpractices may or may not help them earn more money, they will definitely earn the wrath of Allah ﷻ, unless they seek sincere repentance from Al-Ghaffar, The Forgiving.

Commodities being dealt in the business should be lawfully acquired, and should not be something that is haram in nature, for example, alcohol. Products that have been stolen or acquired through other unlawful means should not be sold or purchased.

Narrated by Hakeem ibn Hizaam, who said,

“I asked the Prophet , “O Messenger of Allah, a man may come to me asking for something that I do not have. Can I sell it to him then go and buy it for him from the marketplace? He said, “Do not sell that which you do not possess.”

[Collected by An-Nasaa’i (4613), Abu Dawood (3503) and at-Tirmidhi (1232) | Classed as Sahih by al-Albaani]

It is strictly prohibited in Islam to sell something that is not in one’s possession. To sell something that one has not purchased and is not in possession of, or something that one has purchased but the possession isn’t under one’s ownership yet, is contradictory to the laws of business in Islam, as such transactions are ambiguous in nature.

Narrated by ‘Amr ibn Shu‘ayb, from his father, that his grandfather said,

“The Messenger of Allah said , ‘It is not permissible to arrange a loan combined with a sale, or to stipulate two conditions in one transaction, or to make a profit on something that is not under your control, or to sell something that you do not possess.’”

[Collected by At-Tirmidhi (1234), Abu Dawood (3504) and an-Nasaa’i (4611) | Classed as Sahih by at-Tirmidhi and al-Albaani]

Rights of Workers

Islam places great emphasis on paying the workers on time according to the hard-work they put in, and also treating them with respect and kindness. When an employee works for their employer, they get into a sort of contract, whether it be oral or written. It is the duty of the employer to fulfill all the contractual obligations that were agreed upon by both parties. It is extremely crucial that one does not delay in paying the workers their wages, as it is a Sunnah of the Prophet  and also beneficial for the workers. When workers are paid on time, they are satisfied with their jobs which ultimately results in better productivity and better results, leading to better growth and increased profits for the business.

Allah ﷻ says,

“O you who have believed, fulfill (all) contracts.”

[Al Qur’an 5:1]

It was narrated from ‘Abdullah bin ‘Umar that the Messenger of Allah said,

“Give the worker his wages before his sweat dries.”

[Sunnan Ibn Majah 2443 | Grade – Sahih (Darussalaam)]

Missing Jumu’ah Salaah for Work

Allah ﷻ  says,

“O you who have believed, when (the adhaan) is called for the prayer on the day of Jumu’ah (Friday), then proceed to the remembrance of Allah and leave trade. That is better for you, if you only knew.”

[Al Qur’an 62:9]

It was narrated from Al-Hakam bin Mina’ that he heard Ibn Abbas and Ibn Umar narrate that while he was on the minbar, the Messenger of Allah ﷺ said,

“People should stop neglecting Jumu’ah or Allah will place a seal on their hearts and they will be deemed as being among the negligent.”

[Collected by Jami at-Tirmidhi 1315 | Grade- Sahih (Darussalaam)]

Not praying Jumu’ah salaah (or any salaah) due to being engaged in business activities is not an excuse. Salaah is an obligation upon every Muslim, and praying Jumu’ah salaah in congregation is an obligation upon every male Muslim. Hence, it should never be missed or neglected.

Riba (Interest)

Allah ﷻ says,

Those who consume Riba will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytaan (Satan) leading him to insanity. That is because they say: ‘Trading is only like Riba, whereas Allah has permitted trading and forbidden Riba. So whosoever receives an admonition from his Lord and stops consuming Riba, shall not be punished for the past; his case is for Allah (to judge); but whoever returns (to Riba), such are the dwellers of the Fire — they will abide therein. Allah will destroy Riba and will give increase for Sadaqaat (deeds of charity, alms). And Allah likes not the disbelievers, sinners.”

[Al Qur’an 2:275-276]

Allah ﷻ continues,

“O you who believe! Fear Allah and give up what remains (due to you) from Riba (from now onward) if you are (really) believers. And if you do not do it, then take a notice of war from Allah and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums).”

[Al Qur’an 2:278-279]

It is common knowledge for every Muslim that dealing with Riba or interest is a major sin. Dealing in any business transaction that involves Riba is strictly prohibited as understood from the verses mentioned above, whether it’s in the form of   taking Riba-based loans to start off a business, or paying off debts, or to invest in businesses. Stocks that involve Riba are also absolutely prohibited in Islam and those who do so will be held accountable for it in the court of Allah ﷻ.

These are few of the basic guidelines from the shari’ah that should be adhered to by all Muslims while engaging in business so that they do not have to suffer in their afterlife merely to gain temporary benefits in their worldly life. May Allahﷻ   guide us to do every act in accordance with the Quran and Sunnah, that is most pleasing to Him and most beneficial for us in our afterlife, Aameen.

Written by:  Iram Atiqulla 
Edited by: The Editorial Team
© The Islamic Reflections Blog


1 thought on “Shari’ah Guidelines for Business

  1. BARAK ALLAHU FEEKUNNA for the entire team to come up with such a topic.. it is very important to know about all these laws regarding business… Jazakumullahu Khayran.. written very well

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