in the Kingdom of Saudi Arabia from 18–23 Jumada al-Akhirah 1408 AH (6–11 February 1988 CE).
Having reviewed the studies submitted to the Academy on the subject of “Zakah on Company Shares,” it resolved as follows:

First: Zakah on shares is obligatory upon their owners. The company’s management may discharge it on their behalf if this is stipulated in the articles of association, decided by the general assembly, required by state law, or if the shareholder authorises the management to pay the zakah due on his shares.

Second: The company’s management shall calculate and pay zakah on shares in the same manner that a natural person pays zakah on his wealth. In other words, all the shareholders’ assets are to be treated as the assets of a single individual: zakah is assessed accordingly with respect to the type of wealth subject to zakah, the nisab, the rate taken, and the other criteria applied to an individual’s zakah. This is based on the principle of pooling (khulta) as adopted by those jurists who apply it to all types of wealth.
The portion represented by shares that are not liable for zakah—such as shares held by the public treasury, charitable endowment shares, shares owned by charitable organisations, and shares owned by non-Muslims—is to be deducted.

Third: If, for any reason, the company does not pay zakah on its assets, the shareholders themselves must pay the zakah due on their shares. Should a shareholder be able, from the company’s accounts, to determine the zakah attributable to his shares had the company paid zakah in the manner described, he must calculate and pay zakah on that basis, for this is the primary method of zakah on shares. If he is unable to determine that amount