Zakah on the funds of a cooperative association established to serve its members
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Fatwa No. (15981)
Q: We are a group of young men who established a cooperative association among ourselves. We number ten people, and each one pays 100 riyals per month. The goal of this association is to benefit from it in the days to come, if Allah wills, in trade and by investing it in what brings us lawful profit. It has another goal, which is borrowing from this association for its members only. The question is: Is zakah obligatory on such an association, and what is the method for purifying it, and the time at which we pay it... and so on regarding its subject matter.
A: Zakah is obligatory on the funds of the aforementioned association upon the completion of each lunar year. This is done by appraising the goods in its possession that are offered for sale at their value upon the completion of the year, adding the appraised value to the cash held by the association, and paying one-fourth of a tenth from the total, i.e., two and a half riyals from every hundred. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: We are a group of young men who established a cooperative association among ourselves. We number ten people, and each one pays 100 riyals per month. The goal of this association is to benefit from it in the days to come, if Allah wills, in trade and by investing it in what brings us lawful profit. It has another goal, which is borrowing from this association for its members only. The question is: Is zakah obligatory on such an association, and what is the method for purifying it, and the time at which we pay it... and so on regarding its subject matter.
A: Zakah is obligatory on the funds of the aforementioned association upon the completion of each lunar year. This is done by appraising the goods in its possession that are offered for sale at their value upon the completion of the year, adding the appraised value to the cash held by the association, and paying one-fourth of a tenth from the total, i.e., two and a half riyals from every hundred. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.