The Ruling on Islamic Investment Companies

Question:
What is your opinion, Honorable Shaykh, regarding the Islamic Investment Company?

Answer:
If it is truly Islamic in name, yes, and it deals in transactions that Islam permits, then there is no harm. But if the name is Islamic and the actions are the opposite, dealing in riba (usury or interest) or with intoxicants, then the name is not sufficient; the reality is required. Today, most companies are characterized by a lack of integrity because they operate with banks and with people, and few companies are scrupulous and disciplined.
The result is that it is better to stay away from companies, unless it is a limited company between two or three people who control and supervise it, or a partial company, or one in land or whatever you wish. There is no harm in these; their owners are bound to them, and there is no excessive uncertainty in them. As for the large joint-stock companies, they are not free from a lack of discipline, so it is better for a person to avoid them.