Does the partner of a business get first refusal in this situation

Fatwa ID: 03086

Answered by:  Maulana Mohammad Ahsan Osmani​

Question:

If two persons are partners in business property and some wish to sell.

Does the partner have the first right of refusal?

 

Answer:

In The Name Of Allah, The Most-Merciful, The Most Kind

 

The partner’s right of preemption (shufa) is established, i.e. his entitlement to purchasing his associate’s portion before anyone else, in the object of sale (which has not been divided, because after division the right of preemption is annulled), after the transaction has been completed. For example, Zaid and Bakr are partners and jointly own land. Then, Zaid decides to sell his portion to Amr. When the news of this transaction reached Bakr, he immediately demanded his right of preemption within the session where he received knowledge of the sale, irrespective of whether he was alone or around people. If he did not make this demand immediately, despite having the ability to do so, or showed disinterest in exercising his right (by busying himself in another activity, remaining silent, leaving that very session, etc.) after becoming aware of the sale which took place between Zaid and Amr, then his right of preemption will become null and void. This first demand is called talabul muwathaba.

After talabul muwathaba, he will leave that session, where he received the news, and go to the seller (Zaid), if the land is still in his possession, or he will go to the buyer (Amr), regardless of the land being in his possession or not, or he will go to directly to the land. Whichever option he chooses, he will say something along the lines, “Amr has bought this land. I am it’s pre-emptor. I have demanded my right to preemption, and I demand it now!” This second demand is called talabul taqreer. For both of these demands, appointing witnesses is not a condition for their validity, however, it would be better to do so. Lastly, the portion of land which he is demanding will come into his possession by him acquiring it through mutual agreement, between himself and Amr, or the decision of a judge (when he files a lawsuit against the purchase and demands preemption).

Another scenario would be: Zaid and Bakr jointly own land, and Zaid wants to sell the whole land without Bakr’s consent. In this case, it would be impermissible for Zaid to do such a thing because he would be utilizing someone else’s wealth without their authorization.

(Mukhtasarul Qudoori: Kitabul Shufa [Bushra]; Al-Hidaya: v. 7, Kitabul Shufa [Bushra]; Kanzul Daqaiq: v.3 Kitabul Shufa [Bushra]; Raddul Muhtar: v. 9, Kitabul Shufa [Maktaba Imdadia]; Al Lubab fi Sharhil Kitab: v.2 Kitabul Shufa [DKI]; Fatawa Hindiya: v. 5, Kitabul Shufa [DKI]; Qamoosul Fiqh: v 4, p. 199-201 [Zam Zam]) 

 

Only Allah knows best

Written by Maulana Mohammad Ahsan Osmani

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

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