Areas of law every entrepreneur should know

Areas of law every entrepreneur should know 

Company, Product, People

The majority of entrepreneurs running their own small and medium businesses do not have the legal expertise and may not have their own attorneys to assist them in every decision. Just as an entrepreneur needs to know the basics of strategic plans, accounting and marketing, they need also to understand the basics of the commercial law to be able subsequently to avoid potential failure in costly lawsuits.

You do not need to go to law school to be a successful entrepreneur: all you have to do is learn the legal basics in order not to be taken by surprise.

Below are three areas in the UAE law that every entrepreneur should know about:


Vicarious liability

Most entrepreneurs are aware that it is their responsibility when their employees cause harm to themselves or others while they are in the company or while using the company’s equipment. The truth, however, is that employers are responsible for the harm caused by the employee anywhere and at any time if the employee has caused the harm while performing his job duties.

For instance, you might ask an employee to send something via the post office on his way home. If that employee had an accident in the meantime, even if he was driving his own car, your company might quite possibly be held responsible for the harm caused. This is a simple common case, but some other incidents can have a major impact on your business.

To avoid putting yourself and your company in such situations, you can take precautions through what is legally known as indirect liability by purchasing a commercial general liability (CGL) policy that covers employees at work even while they use their own vehicles.

Spending a few minutes to read the UAE civil procedure law pertaining to third party liability and the UAE civil procedure law pertaining to procuration will spare you and your company many troubles, not to mention costs.


Overtime rules

Some start-ups or small companies face legal problems that may lead to the payment of large sums of money or even the closure of the company as a result of non-payment of overtime wages to employees. If you have employees working overtime after the official working hours, pay them for such overtime and let your administrators make sure that salaries and overtime wages are paid in accordance with the law and the official hours approved by the Ministry of Human Resources and Emiratisation. Although it may be costly at the time, you will later save the litigation costs that can be avoided as a result of wage manipulation or evasion.

According to Article (65) of the Federal Labor Law, the maximum number of ordinary working hours for adult workers shall be eight hours per day or forty eight hours per week. The number of hours may be increased to nine hours per

day for people employed in trade, hotels, cafeterias, security and other jobs that may be added by a decision issued by the Minister of Human Resources and Emiratisation.

The daily number of working hours may also be reduced for strenuous or harmful works, subject to a decision issued by the minister. The ordinary working hours shall be reduced by two hours during Ramadan. The periods spent by a worker commuting between his place of residence and workplace shall not be calculated within the working hours.

The daily working hours shall be regulated so that the worker does not work more than five consecutive hours without rest, meal and prayer intervals, which shall be

no less than one hour and shall not be included in the working hours.

Should work circumstances require a worker to work beyond the ordinary working hours, the additional hours worked shall be treated as overtime, for which the worker shall be paid a wage equivalent to the ordinary hourly wage plus no less than 25 per cent thereof.

Moreover, should work circumstances require workers to work overtime between 9pm and 4am, each worker shall be entitled to an overtime wage equivalent to the ordinary hourly wage plus no less than 50 per cent thereof.

For more information on the provisions of working hours, please see UAE Labor Law, Title Four.

Other useful lnformation: Ministerial Resolution No. 401 for 2015 on midday working hours.


Patent, copyright and trademarks

You may have a perfect product, logo, website and company’s name, but if any of these elements constitutes another person’s intellectual property, you will have to pay for using these elements without prior permission.

Intellectual property and patent law includes protecting inventions and copyrights, which safeguard artistic works and trademarks. Penalties for violating intellectual property rights usually range from high fines or harsher penalties that may include imprisonment. Both these fines and penalties can be fatal to an entrepreneur at the beginning of his career.

Being aware of the intellectual property law will definitely help you not to commit violations of this type. However, hiring a lawyer to register patents and intellectual property rights for logos and product names and trademarks can be costly but is inevitable because it will save the company a lot of money in the long run and keep it away from litigation.

The Ministry of Economy is the authority responsible for registering and protecting intellectual property in the UAE. You can apply for registering a trademark, intellectual compilation, patent or trademark electronically via the ministry’s website. Click here to learn more..

Individuals’ intellectual property is safeguarded by the law as intellectual property is strictly protected in the UAE. The law also outlines the penalty for intellectual property theft or infringement, whereby anyone can file a complaint about infringement of his brand, trade agency or any other compilations he owns.

As stated in the Law on the Protection of Intellectual Property Rights, a jail term and a fine of no less than AED5,000 and no more than AED100,000 or one of these two penalties shall be imposed on anyone who submits forged documents or provides false information to obtain a patent, a benefit certificate or practical knowledge and anyone who imitates an invention, a formula or an element of practical knowledge or intentionally infringes upon any right protected by this law. The same penalty applies in case of industrial design infringement.

You can view more laws regulating intellectual property rights in the UAE by visiting the website: Emirates Intellectual Property Association.

In general, as an entrepreneur and a business owner, you have to educate yourself about the legal fundamentals so that you do not have to be involved in troubles that can be spared and affect your reputation and business success.

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