SR10,000 Fine for Using Another Merchant’s Trade Name in Saudi Arabia
In a recent update regarding the Saudi Trade Name Law, merchants in Saudi Arabia are now subject to significant penalties for using trade names that have already been registered by other businesses.
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Specifically, a fine of SR10,000 will be imposed on merchants who utilize a trade name that is already reserved or registered by another entity.
Key Regulations Under the Trade Name Law
The Ministry of Commerce has released draft executive regulations for the Saudi Trade Name Law, which aims to regulate the use of trade names effectively. These regulations stipulate:
- Prohibited Trade Names: Merchants are not allowed to use names that are politically, militarily, or religiously suggestive. Additionally, names that resemble those of established local or international organizations are also banned.
- Serious Violations: The most severe infractions, such as using a prohibited trade name, will incur a higher fine of SR15,000.
- Registration Obligations: Merchants must adopt and register their trade names in the commercial register. This law comprises 23 articles that outline the necessary guidelines for name registration.
Public Feedback and Implementation
To gather public input, the executive regulations have been published on the Istila’a public survey platform. The Council of Ministers approved the new Trade Name Law on September 17, 2024, highlighting its importance in maintaining fair business practices.
Additional Regulations
The regulations also allow for the reservation of names related to Saudi Arabia, its cities, and public places, provided they comply with specified guidelines. Merchants must ensure that their chosen names do not harm the reputation of the Kingdom or its regions.
Classification of Violations
Violations are categorized into serious and non-serious types, with fines for non-serious violations ranging from SR1,000 to SR5,000. Examples include failing to display the trade name on business documents or signage.
Service Fees
The regulations include fixed fees for trade name services:
- SR200 to reserve a trade name in Arabic
- SR500 for an English trade name
- SR100 to extend the reservation period
Conclusion
Merchants are urged to familiarize themselves with these regulations to avoid hefty fines and ensure compliance with the Saudi Trade Name Law. A review committee will oversee violations and has the authority to adjust penalties based on individual circumstances.
For more updates on trade regulations in Saudi Arabia, stay tuned to our news section.
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