Community interest companies (CICs)

Everyday Islamic Finance Business and Career Questions
#1

Salaam Mufti Saahib,

The government has created a new charity vehicle called a community interest company (CIC). Details here: https://www.gov.uk/set-up-a-social-enterprise

What is the hukm shari of these types of company, would you consider them jaiz?

Arfan

Vesting schedules
#2

Assalaamu alaykum,

This is a legal structure and is fine to use.

Allah knows best

#3

Salaam Mufti Saahib

We are setting up the CIC as I said in the earlier message. We will be approtining shares to indviduals based on standard vesting schedules (they get an initial % and then further % based on their continued input). For example, upon setting up the contract we award 5% and then 5% every 6 months for 2 years conditional upon them meeting some preagreed KIPs. Is this jaiz?

Thanks

Arfan

#4

Assalaamu alaykum,

When setting up the contract, what is the 5% award for? What is it in lieu of?

And are the semi-annual payments profit dividends?

#5

5% for initial specialist consultation.

There are no payments, the vesting schedule is used to provide further equity in return for continued effort and is KPI based, so as long as you keep doing X work you’ll get Y% after 6 months etc.