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Is it Forbidden to Lend with Ribbis to a Corporation?

Rav Yosef Dovid Josilowsky, Dayan at the Bais HaVaad

Case: Reuven was granting a loan with interest to a large limited liability company. He noticed that the CEO’s name sounds Jewish and was concerned that this might create a prohibition of lending money to this corporation with interest. 

Question: Is this indeed a problem? 

Answer: Rav Moshe Feinstein writes that it is permitted to lend money to an LLC with ribbis. He says that there is no ribbis problem in such a case because a “loan” requires that the recipient has a personal responsibility to repay the loan. Here, there is no person taking personal responsibility for the money. 

The Minchas Yitzchok writes that this teshuva of Rav Moshe is very hard to understand, though, for there are numerous Gemaras that seem to say that ribbis does apply even when there is no individual personally guaranteeing and taking responsibility for the payment. One such example is a Gemara in Megillah that states that it is forbidden to sell a shul with ribbis, even though there is no single individual who owns or takes responsibility for the shul. 

Because of this problem, most Dayanim will only use Rav Moshe’s heter when another reason for leniency also is in play. 

The Maharshag brings proofs that even if lending to a limited liability corporation is forbidden, it would only be forbidden m’derabanan. Accordingly, there is room for more leniency.

After all this, we can say that if the CEO of the corporation is a non-religious Jew we can rely on the many Poskim who rule that it is permitted to lend with ribbis to today’s irreligious Jews.

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