Company and Inheritance

Q. I am busy negotiating for a plot. I have been advised to set it up as a company. I want to also make sure that I plan for the event of my death for my wife and children. What would be the best way to structure this company in Shariah.

A. A company has no validity in the Shariah. On your death, the property registered in a company’s name will not be part of your assets for distribution conforming to the Shariah’s laws of inheritance.

Furthermore, if your heirs are not Deeni-conscious, the issue will be greatly complicated. All the heirs may then not receive their shares in the property. Those who are the registered shareholders of the company in terms of kuffaar law will have control of the property and its income. It is therefore best not to form a company.