Corporations and Partnerships with Respect to Ribbit: Difference between revisions
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Corporations and Partnerships with Respect to Ribbit (view source)
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# 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 this is an iska and unless the laws of iska are followed it is interest.<ref>Rama 177:3, Shach 177:13. | # 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 this is an iska and unless the laws of iska are followed it is interest.<ref>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. | * 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.</ref> | * 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.</ref> | ||
# According to those who are lenient, it is acceptable even if the partnership is unequal partnership and certain partners invested more than the others.<ref>Chelkat Binyamin 177:56 based on Chachmat Adam</ref> | # According to those who are lenient, it is acceptable even if the partnership is unequal partnership and certain partners invested more than the others.<ref>Chelkat Binyamin 177:56 based on Chachmat Adam</ref> | ||
# 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.<ref>Chelkat Binyamin 177:57 writes that Chavot Daat forbids while the Shach permits.</ref> | |||
# 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.<ref>Chelkat Binyamin 177:58 writes that it is possibly worse than the dispute above and nonetheless the Torat Ribbit thinks it is comparable.</ref> | |||
==Corporations== | ==Corporations== | ||
