Corporations and Partnerships with Respect to Ribbit

From Halachipedia

Partnership of Jews and non-Jews

  1. It is forbidden to charge or take interest from an individual Jew or group of Jews. Some poskim allow borrowing or lending on interest to a partnership of Jews and non-Jews if the non-Jews comprise at least half of the group to which one is lending or from which one is borrowing.[1]

Partnership between Jews

  1. If Jews go into a partnership and both invest in the business, according to Ashkenazim, the business can pay out its investors in any payment structure it likes since it is a partnership and not a investment by one party with another party. According to Sephardim many say that this is an iska and unless the laws of iska are followed it is interest.[2]
  2. According to those who are lenient, it is acceptable even if the partnership is unequal partnership and certain partners invested more than the others.[3]
  3. According to those who are lenient to consider a partnership unlike an iska, some say that it is nonetheless forbidden for a working partner to accept more of the responsibility of losses and offer the other partners a greater share of the gains. Some are lenient on this.[4] Some say that it can be permitted if one gives an iska wage to the working partner, which could even be a dinar, as described below (#Wages_for_an_Iska_Worker).[5]
  4. According to those who are lenient to consider a partnership unlike an iska, some say that it is nonetheless forbidden for a working partner to offer another partner a fixed profit. Some are lenient on this.[6]

Corporations

  1. Some poskim say that it is permitted to lend or borrow on interest from a corporation even if it is owned by Jews because halacha views the corporation as a dummy entity that isn’t Jewish. Others say that it is only permitted to lend on interest from the corporation but not borrow on interest from them, while others still forbid both borrowing and lending with interest from a Jewish corporation.[7]

Non-Profits

  1. Money that belongs to orphans who aren’t bar or bat mitzvahed can be lent with rabbinic interest[8] but not Biblical interest.[9] This is the practice.[10]
  2. The is permitted to collect the rabbinic interest even if it is collected after he is bar or bat mitzvahed as long as it was arranged beforehand.[11]
  3. If the orphan’s money was indeed lent with Biblical interest, if the borrower invested and in fact made as much as the percent interest that was demanded he needs to pay it.[12] Some say that he only needs to pay it if he made twice as much as was demanded.[13]
  4. Money that is designated for talmud torah, poor people, or a shul can be lent with rabbinic interest.[14]
  5. Some say that it is permitted to lend money with rabbinic interest in order to have money to spend on a Shabbat meal or Suedat mitzvah.[15]
  6. This leniency does not apply to money designated for a tzedaka unless it was given to a charity and is in the domain of the charity.[16]
  7. Charity that is designated for an individual poor person can be lent with rabbinic interest.[17]
  8. Can you lend money with rabbinic interest to spend that money for a mitzvah? Some poskim hold that it is forbidden,[18] while others hold it is permitted.[19]
  9. If a power of attorney or agent lent money of orphans with interest on their behalf and they already took that money the power of attorney or agent doesn’t need to pay it back and the orphans as well can keep it.[20]

Iska

Definitions

  1. It is forbidden to give someone money to invest with an equal or greater amount of potential for the owner to gain than the worker because doing so is interest. The deal is considered to have more potential for the owner to gain than lose (karov lsachar vrachok mhefsed). The only reason that the worker would accept such a deal is because the owner is extending him a loan through which the worker can gain.[21]
  2. If someone gives his worker money and says that half is considered a loan and half an investment that is considered an iska and is forbidden without any other solutions. The half loan can be used by the worker for his own investment but it is completely his responsibility to repay the capital. The half investment is not to be used by the worker for his personal needs, is in the domain of the borrower, and whatever it gains or loses goes to the owner. This is a classic iska, which literally means investment.[22]
    1. For example, if a person gives the worker $100 for an iska. The worker invests all of the money and makes $10 profit. In a classic iska, the worker and owner would split the profits and the worker would return $105. Let's say that the worker invested and lost $10. In the iska arrangement, the worker and owner would again split the losses and the worker would return $95. This arrangement is forbidden without any other solutions.[23]
  3. The iska document must clearly state that it is an investment with part loan and part investment and not simply that it is a loan document or the like. Additionally, even if one is using a fixed cap for the profits that the agent needs to give the investor it is nonetheless forbidden to write that the agent owes that amount from the outset because it could be that he will not make those profits.[24]

How to Permit an Iska

  1. This can be remedied by either making it a favorable deal for the worker or by paying him. To make the deal favorable for the worker that would mean making it such that there is a greater percentage of gains that the worker makes than the percent of losses he assumes.[25]
  2. In the above example, if the worker was given a stipulation under which he would keep 2/3 of the gains and only assumed 1/2 of the losses, then it would be permitted. So, when he gained $10 he would return $103.3 and when he would lose $10 he would return $95. Alternatively, they could have arranged that the worker would keep 1/2 of the gains and only assume 1/3 of the losses. For our example, when the worker would gain $10 he would have to return $105 but in the case of a $10 he would return $93.3.[26] We hold that this arrangement is effective with any percentages as long as the amount that the worker stands to gain is greater than the amount he stands to lose.[27]

Wages for an Iska Worker

  1. If they stipulate in advance it is sufficient to pay the iska agent a small wage.[28] Some hold that any amount above a pruta is sufficient, while others hold that it is a dinar, which is closer to $3.[29] Some say that it must be an amount that is recognizably a wage and not a token payment.[30] The common practice is to give $1.[31]
  2. Some say that if there's a benefit that the agent has in fact that because he has more money from the iska it isn't necessary to pay him. That is, an iska is essentially a part loan and part investment and the part that is a loan belongs to the agent. If the agent would not have been able to invest his loan loan without the extra money of the investment part, such as with half of the money he doesn't meet a certain type of investment vehicle threshold, then the fact that he has a complete iska with the investment part as well is considered his wages.[32] Most others disagree.[33]
  3. If one stipulates that the agent only needs to give a certain amount of profits to the investor and all other profits are waived and given to the agent this can be considered wages for the agent.[34] However, it must be stipulated that these are wages for his work and not simply that the investor waives his rights to them.[35]
  4. Poel batel's wage is defined as asking that the person would take as a salary not to have to work at all. This price would vary depending on their job.[36]

Terms and Conditions of the Iska

If There Are Losses

  1. If the agent loses money he can swear to the fact that he lost money and split the loses.
  2. With the heter iska, it is stipulated that if the agent doesn't want to swear about his loses he can instead pay the agreed sum of money.
  3. It is permitted for the agent to pay and not to swear even if he knows that he lost money and didn’t make that amount.[37]
  4. If the investor knows that the agent certainly lost money then it is forbidden for the investor to claim that the agent should swear or pay him the agreed amount. Furthermore, he can't even accept any extra money even if the agent offers it.[38]
  5. Therefore, to avoid any issue the heter iska generally is written in a way that enables the investor to acquire a portion of all property and commodities of the agent then it is permitted since it generally true that the investor will be unaware of some business, property, or commodity of the agent. In such a case it will be nonetheless permitted to have the agent either swear that he didn't gain or pay the stipulated amount. If even with this stipulation the investor knows that the borrower didn't make the profits discussed by the transaction in any of his businesses, properties, or commodities then he may not pay the stipulated amount.[39]

Obligation of the Agent to Watch the Money

  1. The agent investing the money on behalf of the investor is considered a paid watchman (shomer) since he is being paid for his work.[40]

If the Agent Breaks the Stipulations

  1. It is permitted to create whatever conditions the investor would like upon the agent and if the agent doesn't follow those conditions then the agent takes responsibility for all of the losses and the gains continue to be split as before. Indeed it is permitted for the gent to not follow these conditions.[41] It isn't considered more beneficial to the investor (karov lsachar vrachok mhefsed) since he can only gain and not lose because the original made it possible that it would been a regular iska.[42]
    1. If the agent explicitly states that he is stealing the funds for himself,[43] then all the loses and gains accrue to the agent and not the investor. To avoid this it is advisable to stipulate that if the agent steals the money for himself then he must repay it to the investment. Thereby all profits will continue to accrue to the investor. If the practice is allow the agent to take money for himself and repay it then it isn't necessary to make such a stipulation explicit.[44]

Alterations to Transaction before Maturation

A Loan that was Converted into an Iska
  1. If a person made a loan and then in the middle of the duration of the loan wanted to change it into an iska, they can do so provided that they establish a valid mechanism of acquisition that would make the agreement legally binding. Many hold that it is sufficient to do a kinyan sudar or write a document that converts the loan into an iska. Others require that the lender acquire the capital to be returned or the commodity that the borrower will buy as part of the iska.[45]
  2. If someone didn't convert the loan into an iska effective and instead only orally agreed upon it, then it is essentially still a loan. The borrower even in the event that he profits does not have to split those profits with the investor.[46] If the borrower invested and profited there is a discussion if it is allowed for him to voluntarily give some of the profits to the investor.[47]
An Iska Agreement that was Converted into a Loan
  1. An iska agreement that was renegotiated to be a loan with interest obviously is forbidden.[48] However, if the event that the agent continues to invest the money and indeed made the profits that were stipulated by the original iska, after the fact it can be considered as though they continued a permitted iska and the money doesn't need to be returned.[49]
  2. In this case if the investor claims that the agent made more profits he can't force the agent to swear.[50]
  3. If the agent claims that the money he already paid to the investor was interest and it should be returned, the investor is believed without swearing to say that he accepted it as iska payments because such payment were due to him according to the original iska as there were indeed specified profits and it was not interest.[51]
  4. It is possible to change an iska into an interest free loan with a verbal agreement of the two parties without any other formal methods of acquisition.[52]

Rolling Over a Iska Upon its Maturity

  1. Many poskim hold that upon maturity date of the iska if the investor and agent don't stipulate what to do or actually return the money, it is considered to be assumed that the same iska setup will continue. In other words, the first iska rolls over into another iska unless otherwise stipulated.[53]
  2. If an iska matured and there were profits unless the agent specifies with the investor about those profits that a part belongs to him and only the money that is disbursed to the investor rolls over to the next iska, it continues to be treated as one iska with splitting all the profits according to the original stipulation.[54]

Disputes Between Investor and Agent

  1. The agent claimed that there were profits and gave distributions or dividends to the investor based on those claimed profits. Then after the duration of the investment the agent claims that it was fraud and in fact he did not profit and should only return the capital after deducting the distributions or dividends he made. The halacha is that he is not believed and the investor is entitled to his entire capital since it was given as a profit.[55]

Rights to Administer the Profits

  1. The agent who has the portion of the profits from the investment on the behalf of the investor may not spend 10% as maaser on a tzedaka of his choice. Doing so isn't his right. Rather he should give the portion of the profits to the investor and he should give the appropriate tzedaka he wishes.[56]

Alternate Versions of Iska

Capping Profits

  1. If an iska is otherwise set up correctly with half of it a loan and half investment and there's a wage paid to the agent, then it is permissible to fix a cap of return profit that the agent would have to give and if he made more he can keep it.[57]
  2. It is permitted to arrange that if the agent makes any profit he needs to pay a certain fixed amount to the investor, if the agent doesn't make profit he is exempt, and if he loses then the agent and the investor split the loses.[58]

All Profits to Agent

  1. It is impermissible to have all of the profits of the investment to accrue to the agent for a fixed fee that the agent pays the investor. Doing so is finding a loophole in the laws of interest and forbidden.[59]
  2. It is forbidden to stipulate that the gains and losses accrue to the agent and the agent owes a fixed amount to the investor. This is considered taking interest even if the investor accepts the responsibility for if it is lost, stolen, or an unexpected circumstance.[60]

All Profits to Investor

  1. It is permitted for the investor to make all of the profits of an iska if he pays for the wages and additionally pays the agent an extra fixed income to offset the profits he is acquiring from the agent. It is permitted since there is an element of risk as the investor doesn't know how much profit will be made if at all.[61]
  2. If someone is doing an investment[62] entirely for the benefit of the investor and doesn't take any profits from the investments or has other benefits, he is considered an agent of the investor and not a borrower. In such a case it is permitted even for the agent to accept responsibility for the investment that if it depreciates that he will nonetheless return the capital since he is merely a guard with a lot of responsibility and not a borrower.[63]

Iska for Commodities

  1. If someone takes a job to improve and sell the merchandise or livestock of someone else and he accepts all responsibility of its losses and also agrees to pay its original price if it is destroyed or dies that is forbidden as interest. Even though the worker gains from a percent of the profits of the merchandise or livestock the deal is considered to have more potential for the owner to gain than lose (karov lsachar vrachok mhefsed). The only reason that the worker would accept such a deal is because the owner is extending him a loan, the commodity, through which the worker can gain.[64]

Sources

  1. ↑ The Shoel V’Nishal (Mahudra Kama 3:31) writes to Rav Shlomo Ganzfried, author of the Kitzur Shulchan Aruch, that he held that it was permitted to borrow or lend with interest from a partnership between Jews and non-Jews. He thought that since the partnership signs under the title of an entity and not individuals it is permitted according to Rashi and those who hold that lending on interest through a messenger is permitted. Further, even according to those who argue with Rashi, he thought that it was permitted if there are non-Jews in the group so that the Jews can say that they only profited from the non-Jewish borrowers and not the Jewish borrowers. Rav Yitzchak Schmelkes in Beis Yitzchak (v. 2 Kuntres Acharon no. 32) qualifies the Shoel V’nishal’s permit to cases where there are a majority or at least half non-Jews. Mishneh Halachot 6:145 and 13:130 permits borrowing or lending from banks that have a minority of Jewish shareholders because the Jewish shareholders don’t have a say in how the bank runs. The Maharam Shik YD 158 argues with the Shoel V’nishal’s logic; see there for his leniency with other conditions.
  2. ↑ Rama 177:3, Shach 177:13.
    • Rambam Sheluchin Vshutfin 6:1 includes the laws of a Jewish partnership with the laws of an iska. Therefore, in order for a partnership to pay its partners permissibly and avoid interest they would need to follow all of the laws of iska. However, the Smag 82 and Rif (Shaarim Shevuot 8) argue that a partnership is fundamentally different than an iska investment. In an iska there is one investor and one agent and since the agent is also profiting it is considered part loan. If the agent is working on behalf of the investor to invest the money then it is problematic as that work is being done in compensation of the loan granted to him by the investor, thereby being considered interest. On the other hand, a partnership is where each party invests their own money and the business uses that capital. Since there was no loan, it is permissible for the partnership to pay its partners in any fashion. The Gemara Bava Metsia 69a seems to address this situation but can be read by all rishonim. See Bet Yosef 177:3 and Kesef Mishna on Rambam Sheluchin 2 s.v. vim for discussion. Milveh Hashem cites the Rabbenu Yerucham (Netiv 8) on the side of the Rambam and Ritva b"m 69a on the side of the Rif.
    • Rama 177:3 and Shach 177:13 rule like the Smag and Rif. Chelkat Binyamin 177:56 agrees for Ashkenazim. For Sephardim, Milveh Hashem 2:12:26 rules like the Rambam. He cites the Maharbach 38, Maharikash on S"A 177:5, Chida in Shiurei Bracha YD 177:2, and Maharam Galanti 98 who all rule like the Rambam for Sephardim. Shulchan Aruch 177:24 follows the Rambam regarding a partnership as the Chelkat Binyamin 177:206 points out. Nonetheless, Horah Brurah 177:35 is lenient even for Sephardim.
  3. ↑ Chelkat Binyamin 177:56 based on Chachmat Adam
  4. ↑ Chelkat Binyamin 177:57 writes that Chavot Daat forbids while the Shach 177:13 permits. Torat Ribbit 27:3 writes that everyone forbids having a working partner offer the larger investor a greater return than the percent of losses he accepts.
  5. ↑ Milveh Hashem 2:12:27 based on writes that if the worker partner gives the other investing partner a greater share of the profits then it is considered an iska that needs to be fixed by paying the partner for his work and even a dinar suffices. He writes that he is based on Shiurei Bracha YD 177:2 and Shulchano Shel Avraham 177:9. However, Chelkat Binyamin 177:57 argues that if it isn't equally apportioned it is forbidden according to the Chavot Daat and it can't be fixed by paying a dinar as it is completely karov lsachar vrachok mhefsed.
  6. ↑ Chelkat Binyamin 177:58 writes that it is possibly worse than the dispute above and nonetheless the Torat Ribbit 27:4 thinks it is comparable.
  7. ↑ Igrot Moshe YD 2:63 thought that the prohibition of borrowing with interest does not apply to a corporation. Since no one person has personal liability for the loan, the corporation may pay interest. He based this contention on the opinion of Rabbenu Tam (cited by Tosfot Ketubot 85b) who says that there are two types of indebtedness: a lien on one’s property and a personal one. Rabbenu Tam holds that if a person forgives the borrower and relinquishes the personal lien even if there still is a property lien that was sold to another person, that property lien automatically falls apart. Accordingly, one may receive interest from a bank or invest in bonds or stocks of a corporation, though one still would not be allowed to borrow from a corporation.
    Maharshag YD 3 brought a proof that there is no biblical ribbit to charge a corporation interest from the Gemara Gittin 30a that permits giving money in advance to a kohen so that the next time a person has a crop he can take off Trumah, sell it to kohanim, and then the proceeds are effectively given to the kohen and used to pay off part of the debt so that the owner can keep the proceeds of the sale. The gemara explains that even though there is a rabbinic prohibition of interest to pay in advance for food that hasn’t grown and there’s no market price, here it is permitted since the kohen borrower has no real obligation to pay out of pocket according to the original stipulations. The Chelkat Yakov YD 66 grapples with the Rogachover and Maharshag but ultimately says that it is forbidden rabbinically even though there is a good logic to permit it. Rav Zalman Nechemya Goldberg (Shiurei Ribbit p. 8) questioned the proof of the Maharshag because the risk factor that the debtors won’t pay the bank isn’t as great as the risk that a field gets ruined. Minchat Shlomo 1:28 argues with Rav Moshe and isn’t lenient in either direction. Lastly, Rav J. David Bleich in Netivot HaHalacha v. 2 p. 191-4 disagrees with Rav Moshe that it is impossible to have a shiybud nechasim without shiybud haguf. If there exists a shiybud it also applies to the guf even though there is some external conditions which make it impossible to collect from the shiybud haguf.
  8. ↑ Gemara Bava Metsia 70a concludes that it is only permitted to lend money of orphans as interest if the interest is only rabbinic but not if it is Biblical. This is accepted by the poskim and Shulchan Aruch Y.D. 160:18.
  9. ↑ Although it was clear from the Bavli Bava Metsia 70a it is forbidden to lend money of orphans with Biblical interest, the Maharil responsa 73 cites a practice to do so and justifies it based on the Yerushalmi Sanhedrin 7. However, the Maharil concludes that the practice is completely invalid and should not be followed. The Rama 160:18 cites the maharil that this practice was completely rejected. Shach 160:27 adds that there’s no such practice any more as it was wrong. See Yabia Omer YD 5:13 who cites many rishonim who did explain that the yerushalmi held it was permitted.
  10. ↑ Even though the Shach 160:19 writes that the practice was not to lend orphan’s money with any interest even rabbinic interest, the Nodeh Byehuda YD 40 writes that the practice is completely justified based on the majority of rishonim and Shulchan Aruch. He testified that he did so personally. Pitchei Teshuva 160:20 cites the Nodeh Beyehuda. Chelkat Binyamin 160:200 agreed.
  11. ↑ Pitchei Teshuva 160:23 citign Mishna Lemelech
  12. ↑ Shulchan Aruch Y.D. 160:19. The Rashba responsa 2:174 writes that if the orphan’s money was lent with Biblical interest it must be returned like any case of interest. However, the Maharil responsa 37 tries very hard to allow the orphans to keep it. The Maharam prague edition 969 has another justification.
  13. ↑ The Bet Yosef 160:19 writes that even according to the Mordechai 332 and Maharam’s leniency that we view the loan with interest as though it was an investment (iska) that is permitted it is at most viewed as an iska transaction. Therefore, since in an iska half of the profits go to the investor the orphans only deserve have of the profits made up to the amount of the percent that they demanded. However, the Mahara Sason 162 argues that the lender has to pay all of his profits to the orphans and not just half. The Shach 160:32, Chachmat Adam 130:10, and Chelkat Binyamin 160:215 cite this dispute and do not offer any resolution.
  14. ↑ Shulchan Aruch 160:18. The Rosh, Tur, Rabbenu Yerucham, and Rashba apply the leniency of lending orphan’s money with rabbinic interest to other cases of mitzvah such as talmud torah. The Shulchan Aruch codifies this opinion.
  15. ↑ Pitchei Teshuva 160:22 citing the Bear Yakov, Yalkut Yosef 253:4
  16. ↑ Chelkat Binyamin 160:195 based on Mishna Lmelech
  17. ↑ Chelkat Binyamin 160:196 quotes the Bet Yosef within the Rashba says that lending charity with rabbinic interest is only permitted if the money isn’t yet designated for one poor person. However, the achronim hold that it is permitted as long is it is designated for the poor and even an individual.
  18. ↑ Mishna Brurah (Shaar Hatziyun 242:15)
  19. ↑ Chazon Ovadia Shabbat v. 1 p. 9 writes that it is permitted to lend money with rabbinic interest in order to spend it for a Shabbat meal or seudat mitzvah. This is based on the Magen Avraham 242:2 who says that it is permitted to lend with interest in order to spend for a Shabbat meal.
    • Yerushalmi Sanhedrin 8;2 establishes that it is permitted to lend with interest in order to have money for a meal of a mitzvah such to establish the kiddush hachodesh. Shibolei Haleket 55 applies this also to Shabbat meals. What type of interest is permitted for a mitzvah? Or Zaruah Tzedaka 30 explains that even Biblical interest is permitted to further a mitzvah. Mordechai b”m 287 cites Rabbenu Shmuel who agrees. This opinion is cited in the Aguda b”m 4:73, Maharil 37, and Hagahot Maimoniyot (kushta edition, malveh 4). Mahara Ben Tauba cited in Tashbetz 34 agreed. However, this opinion is rejected by the overwhelming majority of poskim as is evidenced by Bet Yosef 160:18.
    • Maharam (krimnoa edition 109) holds that it is forbidden to lend money for charity with Biblical interest but it is permitted to lend them with rabbinic interest. This is also the opinion of the Rosh responsa 18:8, Rashba responsa 4:232, Shulchan Aruch 160:18, and Gra 160:43. Radvaz 6:2306 writes that everyone holds that rabbinic interest is permitted for charity.
    • Magen Avraham 242:2 cites the Shibolei Haleket that it is permitted to lend with interest for a Shabbat meal. The Netiv Chaim explains that this means borrowing with interest from a non-Jew. However, Rav Ovadia (Chazon Ovadia Shabbat v. 1 p. 7) argues that there is no prohibition to borrow from a non-Jews with interest (Rambam Malveh 5:2). Shulchan Aruch Harav 242:9, Rav Shlomo Kluger in Chachmat Shlomo 242, Kinyan Torah 7:20, Bear Yakov 242 cited by Pitchei Teshuva 160:22, and Chazon Ovadia all hold that it is permitted to lend with rabbinic interest in order to get money for the meals of Shabbat. Shevet Halevi 2:64:1, 8:189 seems also to support this opinion.
  20. ↑ Shulchan Aruch 160:20
  21. ↑ Rashi b"m 68a s.v. ein, Shulchan Aruch Y.D. 177:2
  22. ↑ Shulchan Aruch Y.D. 177:2
  23. ↑ Shulchan Aruch Y.D. 177:2
  24. ↑ Gemara Bava Metsia 68a, Shulchan Aruch Y.D. 177:24. Taz 177:33 clarifies that after the fact in the first case that it was stated as a loan then it is completely forbidden to accept any profits since indeed it is considered a loan according to the written document and we don't follow their oral agreement. However, if the document is ambiguous as in the second case and it was only stated that the agent owes a certain amount and not as a result of a loan then although the document is problematic if there are profits the agent can give the portion due to the investor.
  25. ↑ Shulchan Aruch Y.D. 177:2-3
  26. ↑ Gemara Bava Metsia 68b-69a
  27. ↑ These stipulations are those of the Gemara Bava Metsia 68b as understood by the Raavad Sheluchin 6:3, Tur 177:4, Shach 177:14, Taz 177:8, and Chelkat Binyamin 177:70. This can be followed even if not stipulated in advance. However, once it is stipulated in advance it is sufficient to give the worker even a small increase (Shulchan Aruch 177:3, Chelkat Binyamin 177:162).
  28. ↑ Shulchan Aruch Y.D. 177:3
  29. ↑ Chelkat Binyamin 177:55 cits that the Birkei Yosef holds that a dinar is necessary while the Prisha, Bet Meir, and Chavot Daat think that it could be less than a dinar.
  30. ↑ Bet Yosef 177:2 citing Smag, Chelkat Binyamin 177:55 citing Darkei Teshuva from Bet Dovid
  31. ↑ Igrot Moshe 3:39, Chelkat Binyamin 177:55, Heter Iska of the Bet Din of America, Heter Iska of Star-K
  32. ↑ Taz 177:9
  33. ↑ Chelkat Binyamin 177:28 based on Chavot Daat, Shaarei Deah, and Sherit Chaim
  34. ↑ Shach 177:9, Chelka Binyamin (Kuntres Heter Iska n. 8) based on Rambam Sheluchin Vshutfin 6:4. See also Shulchan Aruch Y.D. 177:3.
  35. ↑ Chelkat Binyamin 177:54 citing Chavot Daat
  36. ↑ Chelkat Binyamin 177:31 and Milvah Hashem 2:12:4 follow the opinion of Tosfot either because Shulchan Aruch didn't clarify and we can be lenient since it is only rabbinic or because it is the simplest explanation in the words of Shulchan Aruch and the Bet Yosef elaborated upon that opinion. Chavot Daat 177:3 also holds that opinion.
  37. ↑ Milveh Hashem 2:12:20, Chachmat Adam 142:10, Chelkat Binyamin Kuntres Heter Iska n. 12
  38. ↑ Igrot Moshe 2:62-63 s.v. vtzarich, Chelkat Binyamin Kuntres Heter Iska n. 13 citing Teshurat Shay 23, Harei Besamim 2:!43,
  39. ↑ Chelkat Binyamin Kuntres Heter Iska n. 13
  40. ↑ Shulchan Aruch Y.D. 177:5
  41. ↑ Rama Y.D. 177:5. It isn't considered as though the agent stole the money since he is doing so for the benefit of the investor (Shulchan Aruch Y.D. 177:5, Taz 177:10).
  42. ↑ Shulchan Aruch Y.D. 177:5. Shach 177:17 clarifies that this is only permitted since an iska is only rabbinic interest to begin with.
  43. ↑ Taz 177:11 notes that it is only effective if the agent states that he is stealing it at the time that he used it for himself, however, afterwards he isn't trusted to say he stole it as opposed to merely used it for the benefit of the investor against the conditions of the investor. Although Nekudat Hakesef 177:5 disagrees the Bear Heitiv 177:12 points out that this Nekudat Kesef is very difficult to understand. Chelkat Binyamin 177:83 agrees with Taz.
  44. ↑ Rama Y.D. 177:5
  45. ↑ Chelkat Binyamin 177:171 cites that the Dagul Mirvava on Shach 177:41 thinks that a kinyan sudar or shtar is sufficient to conver ta loan into an iska, and the Graz argues that only acquiring the money that is to be returned or the product that the borrower is buying is effective.
  46. ↑ Maharshal in Yam Shel Shlomo b"k 8:70 that if they merely orally agree to switch the loan into an iska it is unchanged and in the event of loss the investor doesn't lose. Shach 177:41 cites this.
  47. ↑ Maharshal in Yam Shel Shlomo b"k 8:70 indeed writes that even though the borrower isn't obligated to pay a portion of his profits to the lender since it is a loan, if he wishes to he may do so. The Shach 177:41 cites this. However, the Chavot Daat 177:19 disagrees since this is considered interest after the duration of the loan and forbidden. The Mekor Mayim Chayim 177:19 explains that the Maharshal thinks that the intent of the borrower is to treat it as a investment and so they can pay the profits since it isn't paid with intent for the time-value of money. Chelkat Binyamin 177:171 believes that this is effective even if the borrower and lender are aware that in fact it remained a loan. However, the Brit Yehuda ch. 35 fnt. 18 limits the Maharshal to where the borrower is unaware of the fact that the loan was not effectively changed into a iska. In any event, the Chelkat Binyamin is hesitant to rely upon the Maharshal and only relies upon him if it is after the time of the repayment of the capital and not at the same time as the repayment of capital.
  48. ↑ Taz 177:14 points out that whether this is Biblical or rabbinic interest depends on the dispute in Shulchan Aruch 166:2.
  49. ↑ Shulchan Aruch 177:7
  50. ↑ Shach 177:23, Chelkat Binyamin 177:111. See there for the discussion of the possibility of making the agent swear with a cherem and also the Dagul Mirvava's claim that there would be an obligation to swear because of the joint partnership (see C.M. 93:4).
  51. ↑ Shach 177:23, Chelkat Binyamin 177:111
  52. ↑ Chelkat Binyamin 167:8, 177:171
  53. ↑ Taz 177:14, 177:31, Chelkat Binyamin 177:112. This is regarding a regular iska with part loan and part investment. In Chelkat Binyamin (Biurim s.v. muter p. 650) he quotes a dispute between the Imrei Esh 56 and Bet Yitzchak 2:7 whether a heter iska of the Maharam would rollover to another iska. However, that was specifically because the arrangement was such that there was a period of investment and then a period of loan and the dispute was whether it would automatically rollover to another deal with the same conditions.
  54. ↑ Nemukei Yosef b"m 40b s.v. tanya cites a dispute between Tosfot and the Rambam whether the iska converts into a part partnership and part iska or remains complete iska. He says that Tosfot thinks it automatically developments into a part partnership since the original profits are split and then the new iska is only within the dividend that the investor received. However, the Rambam Sheluchin ch. 8 thinks that it remains a complete iska unless the agent specifies or stipulates with a bet din otherwise. Shulchan Aruch 177:23 follows the Rambam.
  55. ↑ Shulchan Aruch C.M. 81:30, Y.D. 177:20
  56. ↑ Rama 177:22
  57. ↑ Taz 177:12
  58. ↑ Taz 177:12
  59. ↑ Taz 177:12 in explaining Shulchan Aruch 177:6, Chelkat Binyamin 177:91
  60. ↑ Chelkat Binyamin 177:91 based on Prisha and Bach in explaining Shulchan Aruch 177:6, Rama 177:6. Even though Shach 177:20 is lenient, Chelkat Binyamin 177:98 rules against him.
  61. ↑ Taz 177:12
  62. ↑ Chelkat Binyamin 177:19 writes that although the discussion of Rama 177:1 is about property it can also apply to money.
  63. ↑ Sh"t Ran 73 cites the Chachmei Lunil who said that if an investor has an agent invest his money and all the profits go to the investor, then the agent isn't considered a borrower. If so, he can take responsibility for the capital. He quotes that originally the Raavad argued with this leniency but seems to have retracted later. In the Ran himself he says that the agent can even be paid for his work. The Rama 177:1 cites this leniency as the halacha. Based on the Yerushalmi b"m 5:3 the Gra 177:5 supports this Rama but limits it to where the investor doesn't benefit. Chelkat Binyamin 177:16 writes that we are only lenient with this leniency if the borrower gains no benefit from the investment. That is, he isn't gaining a better reputation or is interested in getting another investment in the future with which he can make profits for himself. If he is gaining then he isn't an agent but rather a borrower since he is doing it for himself partially. In the Biurim he cites the Tiferet Lmoshe 170:2 who holds that even if there's any tangential benefit that the agent gains it is forbidden as we see from the case of a guarantor who doesn't personally gain from the loan but may not pay interest (S"A CM 170:1). Chelkat Binyamin disagrees.
  64. ↑ Gemara Bava Metsia 68a, 70b, Rashi 68a s.v. ein, Shulchan Aruch Y.D. 177:1
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