Is Investing in Multilevel Marketing (MLM) and Family Limited Partnerships (FLP) Permissible?
Hanafi Fiqh
Answered by Mawlana Ilyas Patel
Question
I’d like to know whether Multilevel Marketing (MLM) is haram because I recently joined a Family Limited Partnership (FLP) company, and now I’m concerned that it might deceive people. Overview of the work:
- Create the person’s id;
- They have to buy products to join the business worth 68k PKR, which is to gain 2cc;
- After purchasing the products, they are Assistant Supervisors, and they need to bring more people;
- After bringing in one person, they will earn approximately 17000 PKR, and so on. Similarly, achieving different levels in the company after getting the respective number of CCs at different levels/statuses, we earn different salaries, such as supervisor level and more.
Answer
In the Name of Allah, the Most Merciful and Compassionate.
I pray you are in good faith and health.
Most of the multilevel marketing schemes involve impermissible elements such as gambling, interest, ambiguity, deception in making people join, and conditional sales. Hence, these schemes will be based on their contract. [Usmani, Fiqh al-Buyu]
Some scholars say if these schemes are devoid of the elements mentioned above, one will be allowed to derive benefit from one’s sales and through the sales of those whom one has independently recruited, provided that the items are permissible; however, it will be disallowed to receive profits from the new recruitment of downline members and their sales, whereas the top member or director has no work and effort in the downline and their dealings. Lastly, one may give these amounts to charity if one desires to safeguard oneself from doubtful earnings and wealth.
Every case of network marketing will be inspected individually; after that, its ruling will be based on its contracts, facts, and details. Kindly send the business plan and contract to your local Ulama/Darul Ifta in Pakistan with your query and enquire about its operation and sharia ruling.
Related:
- Is Chain System/Network Marketing Halal?
- Are Pyramid Schemes/Network Marketing Businesses Permissible?
- Family Limited Partnership (FLP): Definition, Pros & Cons
- What Is an MLM? How Multilevel Marketing Works
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I pray this helps with your question.
Wassalam,
[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani
Mawlana Ilyas Patel is a traditionally-trained scholar who has studied in the UK, India, Pakistan, Syria, Jordan, and Turkey. He started his early education in the UK. He went on to complete the hifz of the Quran in India, then enrolled in an Islamic seminary in the UK, where he studied the secular and ‘Aalimiyya sciences. He then traveled to Karachi, Pakistan. He has been an Imam in Rep of Ireland for several years. He has taught hifz of the Quran, Tajwid, Fiqh, and many other Islamic sciences to children and adults onsite and online extensively in the UK and Ireland. He taught at a local Islamic seminary for 12 years in the UK, where he was a librarian and a teacher of Islamic sciences. He currently resides in the UK with his wife. His interest is a love of books and gardening.
