Trade Name and Its Disposition for Business Owners

The trade name is one of the most critical elements of a business’s identity. It distinguishes an enterprise from its competitors in the same field. As a result, companies and institutions strive to choose distinctive, easy-to-pronounce, and memorable trade names that reflect their mission and vision.
The Kingdom sets legal regulations for registering trade names and the necessary licenses to conduct commercial activities under a specific name. It is illegal for any commercial entity to use a name identical or similar to another already registered in the same field.
Here, let’s briefly mention the importance of registering a trade name:
We would like to refer to the latest amendments to the Intellectual Property Law in 2023, which included the following:
These amendments have made the trader’s rights in dealing with the trade name more flexible and have increased the legal protection for the unregistered trade name.
Now, we pose a question: Can one dispose of the trade name?
The owner of the trade name may dispose of it by selling, mortgaging, or relinquishing it to others, either individually or with the transfer of shop ownership. It is also permissible to rent the trade name. However, for the disposition to be valid against others, it must be registered with the Companies Registration Department at the Ministry of Commerce.
Here, we briefly mention the main features of the trade name and its disposition according to the text of the system:
The process of transferring the ownership of the trade name happens when selling the establishment or merging it with another establishment in the Kingdom according to the following mechanism:
Finally, by following the steps mentioned above, the ownership of the registered trade name officially transfers to the new owner of the establishment without the need to register a new trade name.