This halachah gives rise to the question concerning owning stock in non-kosher food chains, such as McDonalds. By owning shares in the company, the shareholder is effective a partner in the trade of non-kosher products. Would this ‘passive trading’ also be included in the blanket enactment?
The question, we should note, is limited to companies that trade exclusively (or close to exclusively) in non-kosher foods. If the sale of non-kosher foods constitutes only part of the company’s trading—which is frequently the case, with the exception of abattoirs and the like—all authorities would agree that there is no prohibition in making an investment (see Pischei Teshuvah, YD 117:6). In fact, the prohibition of trading in prohibited foods applies solely to foods that are prohibited by the Torah. Thus, when a (significant) part of the company’s trading is involves rabbinically prohibited goods, it would be permitted to make an investment.
Concerning investing in McDonalds or non-kosher slaughterhouses, Rabbi Chanoch Padwa zt“l (Cheishev Ha’eifod Vol. 3, sec. 44) adopted a strict position, ruling that it is prohibited to invest in a company that trades in (predominantly) non-kosher food. Although concerning shareholding in general he adopts a lenient position, maintaining that shareholding does not constitute halachic ownership of company assets, he writes that it is nevertheless constitutes a partnership in forbidden sales, and is therefore prohibited.
Pischei Teshuvah (loc. cit.), however, cites several authorities who clarify that it is only forbidden to be involved in the sale of non-kosher foods insofar as the Jewish partner has a partial ownership of the goods. Alternatively, even when he has no actual ownership in the products, playing an active role in trading would also constitute a transgression. When neither condition is fulfilled, such as an investment that procures the investor no actual ownership in the goods (Pischei Teshuvah discusses cases in which a legally binding kinyan was not performed), no prohibition applies.
In order to reach an answer, we must therefore ascertain the status of shareholding with regard to ownership of the company in question. The question of whether shareholders are considered partial owners of a company’s assets has numerous halachic ramifications, prominently the question of taking (and paying) interest (ribis) to banks and financial institutions that have Jewish shareholding, and the question of corporations that deal with chametz over Pesach.
Tzofnas Paaneach (Vol. 1, sec. 184), in his typically terse style, writes that a corporation (he writes of banks, but the same would apply to all corporations) is defined as “form without matter.” The prohibition of taking interest, and other prohibitions related to Jewish ownership, is therefore inapplicable.
