Business Questions

The shape of the charge decides it. A late fee calculated as a percentage that accumulates the longer payment is delayed is an increase on a debt in exchange for time, which is riba in its clearest form - and this is true whether a bank charges it or a small business does. A fixed one-time charge that genuinely reflects the administrative cost of chasing a late payment is treated differently by many scholars, because it compensates a real expense rather than pricing the delay. Several Islamic financial institutions take a further step, imposing a penalty to deter default but donating the proceeds to charity rather than recognising them as income, on the reasoning that the deterrent is legitimate while profiting from another's default is not. What is clearly available to you is the practical route: require payment upfront or on delivery, offer an early settlement discount, suspend further service until the account clears, and pursue the debt through proper channels.

Yes, and this surprises people who assume any instalment arrangement is problematic. Islamic law permits a deferred payment sale in which the credit price exceeds the cash price, because a seller may price the same goods differently in different transactions and a sale on credit is a different transaction from a sale for cash. What makes it valid is that the total is fixed and disclosed when the contract is made and can never increase afterwards for any reason. Three conditions follow. You must actually own the goods you are selling - you cannot sell what you do not possess. One price must be agreed at contracting rather than leaving the customer to choose between a cash and credit price later. And no charge may be added for late payment, which is the condition businesses most often break. Where you meet these, you are selling on credit as a merchant, which is different in kind from lending money at interest.

Business zakat falls on the trading assets, not on the business. You count stock you intend to sell at what you could sell it for today, cash in the business accounts, and money customers owe you that you expect to recover. You exclude premises, fixtures, machinery, delivery vehicles, computers and anything else used to run the business rather than sold - these are the means of production and zakat does not fall on them. From that total you deduct short-term liabilities actually due: supplier invoices, wages owed, rent payable. The most common errors are valuing stock at cost rather than resale price, and including equipment that should be excluded. For a partnership or company, each partner calculates on their proportional share according to their own zakat date, and the business does not owe zakat as an entity.

Earning commission as a property agent is permissible in Islam. Brokerage is a recognised contract (samsara) in which you are paid a fee for the service of bringing parties together and facilitating a transaction, and Islamic law has long accepted it. The conditions are that the commission is agreed and known before the work, that you deal honestly and disclose material defects rather than concealing them, and that you do not take commission from both sides without both knowing. The question people usually mean to ask is about financing: if the buyer uses an interest-bearing mortgage, most scholars hold that your commission is earned for the brokerage service rather than for the loan, though a minority advise avoiding transactions structured entirely around riba.

Selling alcohol or pork is treated as impermissible for a Muslim business owner by the large majority of scholars, regardless of who the customer is - the prohibition attaches to dealing in the substance rather than to consuming it, and a well-known narration extends the prohibition on wine to the one who sells it and the one who carries it. Serving non-Muslim customers does not change this. What is a genuinely different question is a restaurant whose own menu is entirely permissible but whose customers may do anything they like afterwards, or a business where a small non-core item exists that you can remove. For someone who has inherited or bought a mixed-menu business, the practical path most scholars describe is transition: remove the prohibited items where you control the menu, and where you do not control it, plan an exit.

Selling on Amazon is permissible. Buying goods, holding them, and reselling at a profit is the most basic form of lawful trade, and using a marketplace platform with fulfilment services does not change that. The conditions are the ordinary conditions of any sale: you must own or have the right to sell the goods, describe them accurately, sell products that are themselves permissible, and deal honestly with buyers. Amazon's FBA model fits comfortably because you buy inventory and ship it to a warehouse - you own it. The models that need more care are dropshipping variants where you list items you have not acquired, and any arrangement where you are selling something you do not yet possess.

Selling online courses is permissible. Charging a fee for teaching is a recognised service contract, and the medium being digital changes nothing about the underlying permissibility. The concerns that actually arise are about conduct rather than structure: whether the marketing accurately describes what the buyer receives, whether income claims are honest, whether the content itself teaches something lawful, and whether you deliver what you promised. Course selling has a genuine reputation problem in this area - inflated earnings claims, manufactured scarcity, and thin content sold at high prices are widespread practices, and each of them engages the prohibition on deception rather than being merely aggressive marketing.

Partnership profit sharing is not merely permitted in Islam - it is the preferred alternative to interest-based finance, and Islamic commercial law developed detailed structures for it. Two rules govern it, and almost every problem people encounter comes from breaking one of them. Profit may be shared in any ratio the partners agree, and that ratio does not have to match their capital contributions, because a partner who also does the work may fairly take a larger share. Loss, by contrast, must be borne strictly in proportion to capital contributed - a partner cannot be shielded from loss, and a partner who contributed only labour bears the loss of that labour rather than a cash liability. The arrangement becomes impermissible when a partner is guaranteed a fixed return regardless of performance, because that converts the partnership into a loan with interest.

Standard dropshipping runs into a genuine Islamic problem: at the moment you sell, you do not own the item. A well-known narration records Hakim ibn Hizam being instructed not to sell what was not with him, and a straightforward dropshipping model - list a product you have never acquired, buy it from a supplier only after the customer pays - falls under that concern for many scholars. It is fixable rather than fatal. Three restructurings are widely accepted: hold a small buffer of inventory so you genuinely own what you list; operate explicitly as an agent who procures on the customer's behalf for a disclosed fee; or structure the transaction as salam, a permissible forward sale where the goods are precisely specified and the price is paid in full at contracting. What most scholars will not accept is the pure intermediary model where you carry no ownership, no risk and no responsibility.

Affiliate marketing is permissible in principle. Earning a commission for introducing a buyer to a seller is a form of brokerage, which classical Islamic law recognises and permits, and there is no entry fee, no downline and no forced purchase to complicate it. The ruling on any particular affiliate income follows the product you promote: promoting a halal product to a willing buyer is lawful, while promoting alcohol, gambling, interest-bearing credit cards or loans, conventional insurance or adult content is facilitating what those products are. Two conditions apply throughout: be honest about the product, including its weaknesses, and disclose that you earn commission, because concealing your financial interest while presenting yourself as a neutral reviewer is a form of deception.

A franchise is permissible in principle. Paying an upfront fee and ongoing royalties for the right to use a brand, system and operating know-how is a legitimate licensing and service arrangement, and Islamic law has no objection to paying for the use of intangible rights that carry real value. Whether a specific franchise is permissible turns on three things: what the outlet actually sells, how the purchase and working capital are financed, and whether the agreement contains terms that create excessive uncertainty or unjust penalties. A halal food franchise financed without an interest-bearing loan, on clear terms, is straightforward; a franchise whose menu centres on alcohol or pork, or whose purchase requires a conventional business loan, raises real and separate issues.

Most contemporary scholars and fiqh academies have ruled against multi-level marketing as it is typically structured, and the reasoning is unusually specific. In a typical MLM the participant pays an entry cost, the product is priced far above its market value, and the real compensation comes from recruiting people below you rather than from selling goods to end consumers. That combination creates a transaction in which the nominal sale is a device: the participant is really paying for a chance at recruitment income, which introduces gharar and maysir, and the earnings of those at the top come from the losses of those at the bottom. A genuine direct-sales business, where products are sold at market price to real customers and commission comes from those sales alone, is a different structure and is permissible.