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Corporate Gifts

Many startup businesses are created through an agreement in which an investor provides funding with a heter iska contract. May the business owner send the investor annual corporate gifts, or an extravagant Shalach Manos on Purim?

Poskim disagree whether the restrictions of avak ribbis apply to parties of an iska partnership. Some permit these gifts as dividends, while others consider them gratitude for the loan portion of the iska agreement, and forbidden.

If one expects to encounter such situations, it is better to structure the iska contract as a kulo pikadon in which there is no loan taking place.

When a business is incorporated, Rav Moshe Feinstein z”l rules that they may borrow (though not lend) with ribbis, and therefore in our case there would be no issue at all. Other poskim are stringent however, and require a corporation to draft a heter iska, which in our case would be best serviced by a heter iska kulo pikadon, as mentioned above.

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