Question:
How is it permitted to own stocks in companies that operate on Shabbos? Seemingly, the shareholder profits from work performed on Shabbos, which is prohibited due to Sechar Shabbos. Furthermore, some companies may be Jewish-owned, in which case it appears that one is benefiting from a Jewish business conducting work on Shabbos.
Answer:
Owning publicly traded stock in a company is generally permitted, even if the company operates on Shabbos. The primary reason is that it is permitted for one to give a gentile money to invest, even if he invests it on Shabbos. Furthermore, a shareholder does not directly own the company’s assets or employees in a manner that makes him responsible for the business’s day-to-day activities. Rather, he owns a financial interest in the corporation and is entitled to share in its profits. The company itself is considered a separate legal and financial entity, and the shareholder does not possess the authority to direct its operations or demand that it cease working on Shabbos. Therefore, the Shabbos labor is not considered to be performed on his behalf. [For many halachic purposes, a shareholder is not viewed as owning the assets and activities of the company in a direct manner. Rather, the funds invested in the purchase of stock are viewed more akin to an investment of capital with the corporation, similar in concept to a loan that allows the company to operate and expand, in exchange for sharing in its profits.]
Likewise, any profits received by the shareholder are not viewed as payment for the specific work performed on Shabbos. Rather, they represent a share of the company’s overall earnings and value, accumulated from its operations over time.
This is especially true when one’s ownership is only a small percentage of a large corporation, where he has no practical control over the company’s activities and no ability to direct its conduct.
Nevertheless, the discussion becomes more serious when dealing with closely held companies or situations in which one’s ownership stake is large enough to provide actual influence or control. In such cases, one should consult a competent Rav regarding the specific circumstances.
Sources:
Admur 245:16; Michaber 245:4; Igros Moshe 4:54; Minchas Yitzchak 3:1; Kinyan Torah 2:33; Piskeiy Teshuvos 245:5