2019/5780
Introduction
In the previous two issues of Kol Torah, we discussed the prohibition of Ribbit and the approach of classic Poskim to the application of Ribbit to corporation. This week, we will present a ruling of Rav Asher Weiss which is nothing short of revolutionary.
Rav Asher Weiss’ Bold Ruling
Overturning one hundred and fifty years of Halachic precedent, Rav Weiss makes a bold assertion that the Halachah regards a corporation as an independent Halachic entity. He argues that since each one of the components of the corporation, by design, does not enjoy full ownership of the corporation to shield them from personal responsibility and liability, therefore none of them is the Halachic owner. In the unforgettable words of Rav Asher Weiss, “The Torah was given to Bnei Yisrael, not to a corporation.”
Rav Asher cites as a precedent a celebrated ruling of Rav Moshe Feinstein (Yoreh Dei’ah 2:62-63 and 3:41) that the Issur Ribbit does not apply if the borrower is a corporation. In such a case, Rav Moshe argues that since the borrower does not have a Shi’abud HaGuf (personal liability) to repay the loan, the business is regarded as the borrower, not the Jew who owns it. While Rav Moshe did not apply this idea to the case of a corporation lending money to a non-incorporated Jew, Rav Asher argues that there is no difference.
Rav Asher cites precedents in classic Halachah where we find that a legal entity owns an item, rather than any individual. Hekdeish (property of the Beit HaMikdash) is not owned by any individual and is its own Halachic entity. If Hekdeish owns Chameitz on Pesach, no Torah prohibitions apply (Pesachim 5b). A Jew is forbidden to own Chameitz, but Hekdeish is not.
The same applies to Mammon HaSheivet, property of the Kohanim. We find that the collective body of Kohanim constitutes an independent Halachic entity in that if dough designated as Challah (bread given to Kohanim) but not yet given to a specific Kohein becomes Chameitz, then no Kohein violates the prohibition of owning Chameitz. This is because the Chameitz is owned by the corporate body of the Kohanim and not by any individual Kohein.
I had the privilege of posing a question to Rav Asher Weiss when he visited Congregation Rinat Yisrael of Teaneck, New Jersey in August 2006. I asked if Halachah respects a trust as an independent Halachic entity as far as the Halachot of inheritance are concerned. Rav Weiss responded in the affirmative, which is in complete accordance with his ruling regarding a corporation.
Defending the TABC Student’s Father
Rav Weiss therefore permits a Jew to acquire the controlling shares of an American bank even if it is impossible to arrange for the bank to operate on the basis of a Heteir Iska. Rav Weiss, in deference to the many Poskim who disagree with his analysis of a corporation, urges making every effort to draft a proper Heteir Iska for this situation. However, he permits acquiring the shares even if one is unable to do so.
Accordingly, we may defend the employment of the TABC father as an attorney for Quicken Loans, even before Quicken Loans signed a Heter Iska. As a large corporation, Quicken Loans is regarded as an independent Halachic entity. The Agudath Israel Rabbanim regarded it as a Jewish entity because of “majority Jewish ownership.” However, according to Rav Weiss, Quicken Loans is not regarded as Jewish-owned since it is a corporate entity. Only Jews are forbidden to extend interest-bearing loans to one another, not corporate entities. Therefore, a Jew may serve as attorney facilitating the extension of loans to Jews from Quicken Loans.
Conclusion – Limitations and Ramifications
One cannot simply, based on Rav Asher Weiss’ ruling, open a bakery, incorporate, and then remain open on Pesach selling Chameitz and be shielded from the prohibition to own Chameitz by the bakery’s corporate status. In a case where one Jew is the sole shareholder, director and CEO of the LLC, the corporation has no substance and is not viewed as an independent legal entity. Rav Weiss’ ruling regarding a corporation (and a trust, as we mentioned above) applies only when there is substance to the business entity apart from any individual would-be owners.
Rav Weiss’ bold ruling has manifold Halachic ramifications. First, it bolsters the stature of the Heteir Iska Kelali conducted by Israeli banks. Customers are primarily relying on Rav Weiss’ ruling, and the Heteir Iska Kelali merely serves to boost the Halachic justification of Jews using such banks.
Second, it bolsters the Halachic standing of debatable sales of corporate owned Chameitz on Pesach. Many question the sale of Chameitz by Jewish-controlled stores that continue operation on Pesach selling Chameitz as usual. Rav Weiss’ ruling obviates the problem (regarding corporate owned stores) since the Chameitz may be viewed as having been owned by a corporate entity on Pesach and not a business owned by a Jew.
Finally, when determining if a utensil requires Tevilat Keilim, Rav Weiss’ ruling should be considered as well. Does a formerly corporate-owned metal or glass utensil require immersion in a Mikvah? One should ask his or her Rav as to how to proceed regarding this matter.
Moreover, one should ask his or her Rav as to whether he or she may rely on this revolutionary ruling of Rav Weiss. In fact, in May 2017, I asked Rav Hershel Schahcter if he concurred with this ruling. He noted that it runs counter to the accepted approach of Rav Moshe Feinstein’s aforementioned ruling (published in Part Two of this series; Rav Moshe rules that a corporation with a majority of shares owned by Jews is considered Jewish-owned). Thus, a consultation with one’s Rav is a must.