INTRODUCTION TO BUSINESS

A). Business is an organization that provides products and services in order to earn profit and four types of participants are involved in a business that is Entrepreneurs, Creditors, Employees, Customers this all work to build a new business like for sole proprietorship, partnership, corporation for this question I choose sole proprietorship and type of business I want do is fashion designer I want have my own boutique to sale my own designer and this business must be register because Malaysia rules and regulation like that after 30 days you start new business must register if not a lot of bad things happen .
1 How to register your new business is you must choose type of business you want to do and after than you go and register the business like me I choose sole proprietorship and I want open boutique for that must have the name of business , must have date of the business, must have place to open boutique, must have address for my fashion boutique ,and manager is me Kesavan Govindasamy. First I will Register my exclusive fashion boutique business to ROC and I will put name to my exclusive fashion boutique is ‘KESAVAN GOVINDASAMY EXCLUSIVE CRETION” after I put name to my exclusive fashion boutique I buy one shop in world one of world tallest buildings it is in KLCC SURIA yes it is my dream and after I think all people know where is my ‘KESAVAN GOVINDASAMY EXCLUSIVE CRETION” exclusive fashion boutique because this KLCC very top I already have address for my fashion boutique my exclusive fashion boutique is in KLCC with world class brand like VERSACE,PRADA,GUCCI,CHRISTIAN DIOR,KIRANA so like that. i am the fashion designer and also the Manager for KESAVAN GOVINDASAMY EXCLUSIVE CRETION” exclusive fashion boutique I start my business at 6 November 2006 I do this business alone it mean sole proprietorship easy to make own decision like that.
2 Business is an organization that provides products and services in order to earn profit and if I don’t register ‘KESAVAN GOVINDASAMY EXCLUSIVE CRETION” exclusive fashion boutique to ROC it may make a lot of problem .like my creation of fashion can somebody curi my design and say this design is belong to him because he register the design and business because he have right to do like that it will happen if I don’t register my ‘KESAVAN GOVINDASAMY EXCLUSIVE CRETION” exclusive fashion boutique to ROC .Any business are must register form 30 days form the date commencement of the business this is to all kind of business
B) when registering new Business
It because that business are not following rules and regulations because that the business cannot be register and in other word business that cannot be registered are the illegal businesses in Malaysia like in Thailand prostitute are doing one the business but in Malaysia the prostitute are illegal businesses this kind of business cannot be registered in this country .All illegal business are cannot be registered. Malaysia have rules and regulation so ervbody must flow the rules and regulation yes some business cannot cannot be registered because is illegal business like Prostitute, drugs, piracy this is the business type of business cannot be registered because drugs business not type of business cannot registered people who have drugs business can go to Jail and WILL HANG OUT ANTILL DIE so drugs cannot to as business it will cause die in jail so this is a some problems in registering new business and also the types of business that cannot be registered in Malaysia
A) Entrepreneurship is the practice of starting new organizations, particularly new businesses. Entrepreneurship is often a difficult undertaking, as a majority of new businesses fail. Entrepreneurial activities are substantially different depending on the type of organization that is being started. Entrepreneurship may involve creating many job opportunities. entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. Entrepreneurship forces "creative destruction" across markets and industries, simultaneously creating new products and business models and eliminating others. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth. For K. Knight (1967) and Peter Ducker (1970) entrepreneurship is about taking risk. The entrepreneur is the kind of person that is willing to put his career and financial security on the line for an idea, spending his time and capital in an uncertain venture. Still another view of entrepreneurship is that it is the process of discovering, evaluating and exploiting opportunities. An entrepreneur could be defined as "someone who acts without regard to the resources currently under his control in relentless pursuit of opportunity " (Jeffry Timmons).
Imagine be Entrepreneur that run own exclusive fashion boutique I want be like MR Bernard Chandran and MR Christian Dior who the best Entrepreneur for fashion world .I want to be like them so I must show this kind of characteristics Desire independence is that want to free don’t other people give order is mean don’t like work under some one want free of outside of control like examples like me I want to do my own business that is open exclusive fashion boutique I don’t like to other people control this one of the characteristics that I have to show if I be an Entrepreneur . I must show I Have strong sense is that have use own ideas, abilities and aspirations to the greatest degree possible yes I must must own idea I want creates one fashion that different form other fashion designer I want I name also like MR DIOR and must motivated by personal and family considerations I want my mom dad support me and help me advice me next characteristics I must show is expect quick and concrete results is want seek a quick return my capital also become impatient discouraged when these results are slow in coming and next characteristics I must show is able to react quickly due to the vulnerability to technological and environmental changes and such changes will have a great effect on its operations and profitability the others important characteristics I must show is are dedicated to my businesses this very important because I dedicated to fashion is my life ,my soul is fashion ,my world is fashion ,my dream is fashion, my life is fashion ,my passion to fashion it mean with so much my time, energy .money and emotions invested because I don’t my ensure that nothing harms my dream this characteristics I must show if I imagine to be entrepreneurs and entrepreneur it is me, who is the driving force behind economic events and I have a vision of a future state that is preferred to the present state to be a fashion designer and open exclusive fashion boutique. This all important characteristics I must have to show if I be imagine like entrepreneurs this is the important characteristics that I have to show.
b) Business have healthy business and unhealthy business. Business healthy is the business are register to ROC and have certification of registration form ROC it is a certificate of registration that conclusive evidence that all requirements of this Act respect of the registration this is a healthy business are follow all rules and regulations for venethink open Gym and he already follow all rules and regulations so he doing healthy business and un health business that business are not follow all rules and regulations like never register the business to ROC also this kind of cannot do in Malaysia like business are involve in prostitute, drugs, piracy and all business that unhealthy like examples Luces verorm is doing piracy business that sell piracy VCD,CD,DVD this all unhealthy business because piracy is like curi other people work is not good because they take profit form others people products without their permission this call unhealthy business. Like do something’s that bad to society like make piracy product will cause a lot of problem like example one ziana bye one talk form shop brand is Dior but after use ziana face become red color so this one problem will happen because that piracy is unhealthy business in Malaysia.
a.) Trademark is used by a business to identify itself and its products and services to consumers, and to set the business and its products or services apart from those of other businesses. A trademark is a type of intellectual property, and in particular, a type of industrial property. Conventionally, a trademark comprises a name, word, phrase, logo, symbol, design, image, or a combination of one or more of these elements. There is also a range of non-conventional trademarks which do not fall into these standard categories. The essential function of a trademark is to serve as an exclusive identifier of the commercial source or origin of products or services, such that a trademark, properly called, indicates source or acts as a badge of origin. The use of a trademark in this way is known as trademark use, and a trademark owner seeks to enforce its rights or interests in a trademark by preventing un authorized trademark use.
Trademark is like you do own bussines have your own Trademark it means logo like for examples DIOR is fashion Brand is Trademark fo fashion no anybody can take Dior Design because they already have their Trademark and Trademark is Terms such as "mark", "brand" and "logo" are sometimes used interchangeably with "trademark". However, the terms "brands" and "branding" raise distinct conceptual issues and are generally more appropriate for use in a marketing or advertising context. When a trademark is used in relation to services rather than products, it may sometimes be called a service mark, particularly in the United States. Other specialized types of trademark include certification marks, collective trade marks and defensive trade marks. If a trademark has become synonymous with the generic name of the product or service in connection with which it is used, it is sometimes referred to as a generalized trademark.
As any sign which is capable of performing the essential trademark function may qualify as a trademark, the trademark concept extends to include a range of non-conventional signs such as shapes (ie. three-dimensional trademarks), sounds, smells, moving images (eg. signs denoting movement, motion or animation), taste, and perhaps even texture. Although the extent to which non-conventional trademarks can be protected or even recognized varies considerably from jurisdiction to jurisdiction [2], shape marks and sound marks are examples of non-conventional marks which are in the process of migrating out of this category.
The use of the symbol next to a trademark, usually in the top right-hand corner, means that the trademark owner claims certain exclusive rights in relation to that trademark. Although this symbol denotes only that the owner holds unregistered trade mark rights, such rights can be enforced by way of an action for passing off. The ® symbol is used to denote that a trademark has been registered with the government trade marks office of a particular country or jurisdiction like you see in TV have this kind of The ® symbol like in TV3,NTV7,ASTRO . Upon registration, a trademark can be enforced by way of an action for infringement.
The law considers a trademark to be a form of property. Proprietary rights in relation to a trademark may be established through actual use in the marketplace, or through registration of the mark with the trade marks office (or "trademarks registry") of a particular jurisdiction. In many jurisdictions, trademark rights can be established through either or both means. Certain jurisdictions generally do not recognize trademarks rights arising through use (eg. China), which limits the extent to which trademark owners can enforce their rights against infringement if they do not already hold registrations for their marks.
A registered trademark confers a bundle of exclusive rights upon the registered owner, including the right to exclusive use of the mark in relation to the products or services for which it is registered. The law in most jurisdictions also allows the owner of a registered trademark to prevent unauthorized use of the mark in relation to products or services which are similar to the "registered" products or services, and in certain cases, prevent use in relation to entirely dissimilar products or services.
Once trademark rights are established in a particular jurisdiction, these rights are generally only enforceable in that jurisdiction, a quality which is sometimes known as territoriality. However, there is a range of international trademark laws and systems which facilitate the protection of trademarks in more than one
Registrability and distinctive character A trademark may be eligible for registration, or registrable, if amongst other things it performs the essential trademark function, and has distinctive character. Registrability can be understood as a continuum, with "inherently distinctive" marks at one end, "generic" and "descriptive" marks with no distinctive character at the other end, and "suggestive" and "arbitrary" marks lying between these two points.
* An inherently distinctive trademark is prima facie registrable, and comprises an entirely invented or "fanciful" sign. For example, "Fuji" had no meaning before it was adopted and used as a trademark in relation to goods, whether photographic goods or otherwise. Invented marks are neologisms which will not previously have been found in any dictionary.
* An arbitrary trademark is usually a common word which is used in a meaningless context (eg. "Dell" for computers). Such marks consist of words or images which have some dictionary meaning before being adopted as trademarks, but which are used in connection with products or services unrelated to that dictionary meaning. For example, VENESSA would be an arbitrary mark if it used in connection with refrigerators, as the term "venssa" has no particular connection with such products.
* A suggestive trademark tends to indicate the nature, quality, or a characteristic of the products or services in relation to which it is used, but does not describe this characteristic, and requires imagination on the part of the consumer to identify the characteristic. Suggestive marks invoke the consumerâ perceptive imagination. An example of a suggestive mark might be VENESSA used in connection with sailing gear.
* A descriptive mark is a term with a dictionary meaning which is used in connection with products or services directly related to that meaning. An example might be VENESSA used in connection with saltine crackers or anchovies. Such terms are not registrable unless it can be shown that distinctive character has been established in the term through extensive use in the marketplace
* A generic term is the common name for the products or services in connection with which it is used, such as "venssa" when used in connection with salt. A generic term is not capable of serving the essential trademark function of distinguishing the products or services of a business from the products or services of other businesses, and therefore cannot be afforded any legal protection. Marks which become generic after losing distinctive character are known as genericized trademarks.
From the "venessa" examples given above it can be noted that the distinctive character of the term is closely related to the products or services in connection with which this term is used.
A general method for assessing the distinctive character of a mark is to consider a consumer's reaction to a mark. The mark may only be inherently registrable if the consumer has never encountered the mark before. On the other hand, the mark is unlikely to be inherently registrable if it informs her about any characteristic of the relevant products or services (eg. whether they are delicious, large, spicy, black or sweet, in the case of fruit). In any other case the mark may not be registrable.
Therefore marks which identify or describe a product or service, or which are in common use, or which are used as geographical indications, generally cannot be registered as trademarks, and remain in the public domain for use by anyone. For example, a generic term such as "apple", or descriptive terms such as "red" or "juicy" could not be registered in relation to apples.
Primary consideration in the selection and use of trademarks should be given to marks with are inherently distinctive, as they possess the strongest distinctive character and do not require evidence of use to establish acquired distinctiveness. A fanciful, arbitrary, or suggestive term can be inherently distinctive and registrable without proof of acquired distinctiveness. Although these categories are most easily applied in relation to trademarks comprising words, the same general principles are applied in relation to all kinds of trademarks. For example, a pine tree shape is descriptive when used on
pine-scented products.
Acquired distinctiveness Although a trademark which lacks distinctive character is not prima facie registrable, most jurisdictions will permit registration if the trademark owner can demonstrate (whether through a licensee or otherwise) that the public exclusively associates the mark with a particular commercial origin or source (ie. the trademark owner or its business). In such cases the mark will be registrable on the basis that this association evidences the distinctive character of the mark as a matter of fact.
If the association is proven the mark is said to exhibit or possess acquired distinctiveness in the European Union and Commonwealth jurisdictions such as Australia, Hong Kong and the United Kingdom, and secondary meaning in the United States. Whether a mark is registrable on the basis of acquired distinctiveness is a question of degree determined by the extent to which the mark has been used in the jurisdiction where registration is sought. In practice, trademark owners rely on evidence of use (eg. sales figures and promotional expenditure) and tools such as consumer surveys to show that consumers chiefly associate an otherwise non-distinctive mark with the trademark owner and its products or services.
In the United States, if a trademark has been used for a continuous period of at least five years after the date of registration, the right to use the mark and the registration may become "incontestable" (eg. invulnerable to cancellation for non-use, but not for becoming generic). In such cases the USPTO checks and confirm whether the request for incontestability meets formality requirements, but whether a registration is incontestable at law can only be determined during proceedings involving the registration.

Signs excluded from registration like Most jurisdictions totally exclude certain types of terms and symbols from registration as trademarks, including the emblems, insignia and flags of nations, certain organisations and the modern Olympic Games, marks which are deceptive as to the origin of their associated products or services (eg. as to their geographic origin), and marks comprising signs which are contrary to accepted principles of morality (eg. marks which are obscene).
Trademarks rights must be maintained through actual use of the trademark. These rights will diminish over time if a mark is not actively used. In the case of a trademark registration, failure to actively use the mark, or to enforce the registration in the event of infringement, may also expose the registration itself to removal from the register after a certain period of time.All jurisdictions with a mature trademark registration system provide a mechanism for removal in the event of such non use, which is usually a period of either three or five years. The intention to use a trade mark can be proven by a wide range of acts as shown in the Wooly Bull and Ashton v Harlee cases.
In the U.S., failure to use a trademark for this period of time, aside from the corresponding impact on product quality, will result in abandonment of the mark, whereby any party may use the mark. An abandoned mark is not irrevocably in the public domain, but may instead be re-registered by any party which has re-established exclusive and active use, including the original mark owner. Further, if a court rules that a trademark has become "generic" through common use (such that the mark no longer performs the essential trademark function and the average consumer no longer considers that exclusive rights attach to it), the corresponding registration may also be ruled invalid.
For example, the Bayer company's trademark "Aspirin" has been ruled generic in the United States, so other companies may use that name for acetylsalicylic acid as well (although it is still a trademark in Canada). Xerox for copiers and Band-Aid for adhesive bandages are both trademarks which are at risk of succumbing to genericide, which the respective trademark owners actively seek to prevent. In order to prevent marks becoming generic, trademark owners often contact those who appear to be using the trademark incorrectly, from web page authors to dictionary editors, and request that they cease the improper usage. The proper use of a trademark means using the mark as an adjective, not as a noun or a verb [3] [4] [5], though for certain trademarks, use as nouns and, less commonly, verbs is common. For example, Adobe sent e-mails to many web authors using the term "photoshopped" telling them that they should only use the term "modified by Adobe® Photoshop® software." Xerox has also purchased print advertisements declaring that "you cannot 'xerox' a document, but you can copy it on a Xerox Brand copying machine." Such efforts may or may not be successful in preventing genericism in the long run, which depends less on the mark owner's efforts and more on how the public actually perceives and uses the mark. In fact, legally it is more important that the trademark holder visibly and actively seems to attempt to prevent its trademark from becoming generic, regardless of real success. Comparison with patents, designs and copyright and While trademark law seeks to protect indications of the commercial source of products or services, patent law generally seeks to protect new and useful inventions, and registered designs law generally seeks to protect the look or appearance of a manufactured article. Trademarks, patents and designs collectively form a subset of intellectual property known as industrial property, because they are often created and used in an industrial or commercial context.By comparison, copyright law generally seeks to protect original literary, artistic and other creative works.
Although intellectual property laws such as these are theoretically distinct, more than one type may afford protection to the same article. For example, the particular design of a bottle may qualify for copyright protection as a no utilitarian [sculpture], or for trademark protection based on its shape, or the 'trade dress' appearance of the bottle as a whole may be protect able. Titles and character names from books or movies may also be protect able as trademarks while the works from which they are drawn may qualify for copyright protection as a whole. Drawing these distinctions is necessary but often challenging for the courts and lawyers, especially in jurisdictions such as the United States, where patents and copyrights will eventually expire into the public domain but trademarks do not. Unlike patents and copyrights, which in theory are granted for one-off fixed terms, trademarks remain valid as long as the owner actively uses and defends them and maintains their registrations with the applicable jurisdiction's trade marks office. This often involves payment of a periodic renewal fee.
As a trademark must be used in order to maintain rights in relation to that mark, a trademark can be 'abandoned' or its registration can be cancelled or revoked if the mark is not continuously used. By comparison, patents and copyrights cannot be 'abandoned' and a patent holder or copyright owner can generally enforce their rights without taking any particular action to maintain the patent or copyright. Additionally, patent holders and copyright owners may not necessarily need to actively police their rights. However, a failure to bring a timely infringement suit or action against a known infringer may give the defendant a defense of implied consent or estoppels when suit is finally brought.
The advent of the Domain Name System has led to attempts by trademark holders to enforce their rights over domain names that are similar or identical to their existing trademarks, particularly by seeking control over the domain names at issue. As with dilution protection, enforcing trademark rights over domain name owners involves protecting a trademark outside the obvious context of its consumer market, because domain names are global and not limited by goods or service.
This conflict was more easily resolved when the domain name user actually used his website to compete with the trademark owner. Cyber squatting, however, involves no such competition, but instead an unlicensed user registering the trademark as a domain name in order to pressure a payoff (or other benefit) from the lawful mark owner. Typosquattersâ”those registering common misspellings of trademarks as domain namesâ”have also been targeted successfully in trademark infringement suits.
This clash of the new technology with preexisting trademark rights resulted in several high profile decisions as the courts of many countries tried to coherently address the issue (and not always successfully) within the framework of existing trademark law. As the website itself was not the product being purchased, there was no actual consumer confusion, and so initial interest confusion was a concept applied instead. Infringing domain names were analogized to a sign identifying one store but falsely placed in front of another, in the hopes that customers will in the end not care that they were duped or will at least give up on trying to reach the right store.
Most courts particularly frowned on cyber squatting, and found that it was itself a sufficiently commercial use (i.e., "trafficking" in trademarks) to reach into the area of trademark infringement. Most jurisdictions have since amended their trademark laws to address domain names specifically, and to provide explicit remedies against cyber squatters.
This international legal change has also led to the creation of ICANN Uniform Dispute Resolution Policy and other dispute policies for specific countries (such as Nominate UK's DRS) which attempt to streamline the process of resolving who should own a domain name (without dealing with other infringement issues such as damages). This is particularly desirable to trademark owners when the domain name registrant may be in another country or even anonymous.
Registrants of domain names also sometimes wish to register the domain names themselves (e.g., "XYZ.COM") as trademarks for perceived advantages, such as an extra bulwark against their domain being hijacked, and to avail themselves of such remedies as confusion or passing off against other domain holders with confusingly similar or intentionally misspelled domain names.
As with other trademarks, the domain name will not be subject to registration unless the proposed mark is actually used to identify the registrant's goods or services to the public, rather than simply being the location on the Internet where the applicant's web site appears. Amazon.com is a prime example of a protected trademark for a domain name central to the public's identification of the company and its products.
Terms which are not protect able by themselves, such as a generic term or a merely descriptive term that has not acquired secondary meaning, do not become remittable when a Top-Level Domain Name (e.g. dot-COM) is appended to it. Examples of such domain names ineligible for trademark protection would be "SOFT.COM" (merely descriptive when applied to a product such as facial tissue), or "BANK.COM" (generic for banking services).
b.)Malaysia have of a lot issues about the pirating problem like pirating VCD,CD,DVD and Malaysian pirates continued to use the Internet as a marketing medium, delivering pirate product to customers via mail or courier service. An even newer phenomenon involves consumers and pirate business owners auctioning off pirate copies of games and other products on Internet auction sites. Pirates of entertainment software have increasingly used deceptive means to fool authorities into believing they are “authorized” by right holders, adding an additional investigative challenge to Malay authorities investigating piracy And also have Book piracy (especially textbooks, scientific, technical, or medical books) grew slightly worse in 2002, with more photocopy piracy and more pirates moving underground and distributing out of their cars/vans, and with evidence of pirate books being exported to the others country
Trademark in there are some issues about the problems of pirating this situation occurs because Domain Name System has led to attempts by trademark holders to enforce their rights over domain names that are similar or identical to their existing trademarks, particularly by seeking control over the domain names at issue. As with dilution protection, enforcing trademark rights over domain name owners involves protecting a trademark outside the obvious context of its consumer market, because domain names are global and not limited by goods or service. The extent to which a trademark owner may prevent unauthorized use of trademarks which are the same as or similar to its trademark depends on various factors such as whether its trademark is registered, the similarity of the trademarks involved, the similarity of the products and/or services involved, and whether the owners trademark is well known.
In Malaysia or in any country If a trademark has not been registered they will have a lot of problem l. Malaysia was first placed on the Priority Watch List in 2000, remained there in 2001, and was lowered to the Watch List in 2002, to recognize some progress made against illegal optical disc plants. Strong anti-piracy statements from high-level government officials, and increased inspections and raiding activity, including against licensed and unlicensed optical disc factories (chiefly under the Optical Disc Act), indicate strong recognition by the government of Malaysia of the seriousness of the piracy problem. Nonetheless, the Malaysian government is working hard, not smart, as optical disc piracy continues to be exported around the globe, the retail market remains decimated by piracy, and pirates fail to be punished because of prosecutorial and judicial bottlenecks, lack of IP expertise, and failure to impose deterrent penalties. Required action for 2003 Enforcement like
• Run more surprise factory raids (licensed and unlicensed) under the Optical Disc Act, as
well as more raids of photocopy shops, residential photocopy and other book/photocopy
production centers, with seizures and closures where warranted.
Prosecutions
• Prosecute high-profile cases against non-compliant or unlicensed optical disc plants,
charging factory owners as well as directors/other principal officers personally for offences,
with full investigations of links to other crimes where applicable.
• Create a unit of legally qualified, adequately trained prosecutors within the Attorney-
General’s Chambers to prosecute high profile copyright cases involving production,
distribution and export of copyrighted materials, particularly pirate optical discs, end- user
piracy of business software, or offset piracy/illegal photocopying of books.
• Institute charges of copyright violations within 30 days after full documentation is received
from copyright owners.
• Secure convictions against businesses that are replicating pirated optical discs.
Courts
• Assign piracy cases to judges trained and experienced in IP cases with a view towards
establishing specialized IP courts.
• Issue directive on the need to impose deterrent sentencing on infringers.
• Issue and enforce sentencing guidelines, with systematic reviews of acquittals and
inadequate sentences, and disclosure of reasons if any are not appealed (including appeals
of corporate end-user piracy cases in which imprisonment is not imposed).
The Malaysian market for copyrighted materials of all kinds remains dominated by
piracy, hurting domestic Malaysian as well as foreign creators. The problem is particularly acute for optical media products, including uncensored music and video CDs (VCDs), DVDs,and CD-ROMs containing entertainment, educational and business software and literary material. For example, pirate copies of Star Wars: Attack of the Clones were readily available on the street prior to theatrical release at RM5 in VCD format, or RM10 in DVD format. Retailers selling at RM5 per VCD now offer a free VCD for every four or five VCDs purchased. Retailers have also started selling three or four VCDs for RM10 . Competition is intense between the pirate retailers. Pirate shops (with no names or signs) have also sprung up, located at the end of the entry point where the many pirate VCD,DVD and CD stalls are located. When raids are conducted, pirate shops have ample time toclose since officers from the Ministry in charge of copyright enforcement in Malaysia, the Ministry of Domestic Trade and Consumer Affairs (MDTCA) sweep the stalls upfront. Pirate
audio CDs also remain widely available throughout the country for about RM5 . Entertainment software companies continue to report devastation to their local market, as pirates continue to dump product—both PC games and those for play on consoles—on the local market at prices as much as 95% below legitimate retail. The number of retail outlets in open spaces, such as SS2, Bangsar, Taipan, Ampang and Jalan Alor, have been significantly reduced, in part due to increased raiding activity discussed below. However, pirate vendors have now moved to fixed shops in these areas (two to five per area) and continue to provide pirate product. Major problems also remain in shopping complexes such as Sg. Wang, Low Yat Plaza, and Imbi Plaza in Klang Valley; and in Holiday Plaza & City Square in Johor. Mini .Some jurisdictions (especially Common Law countries) offer protection for the business reputation or goodwill which attaches to unregistered trade marks through the tort of passing off. Passing off may provide a remedy in a scenario where a business has been trading under an unregistered trade mark for many years, and a rival business starts using the same or a similar mark. If a trademark has been registered like Dior, Gucci, then it is much easier for the trademark owner to demonstrate its trademark rights and to enforce these rights through an infringement action. Unauthorized use of a registered trade mark need not be intentional in order for infringement to occur, although damages in an infringement lawsuit will generally be greater if there was an intention to deceive. For trademarks which are considered to be well known, infringing use may occur where the use occurs in relation to products or services which are not the same as or similar to the products or services in relation to which the owner's mark is registered. Wrongful or groundless threats of infringement and Various jurisdictions have laws which are designed to prevent trademarks' owners from making wrongful threats of trademark infringement action against other parties. These laws are intended to prevent large or powerful companies from intimidating or harassing smaller companies. Where one party makes a threat to sue another for trademark infringement, but does not have a genuine basis or intention to carry out that threat, or does not carry out the threat at all within a certain period, the threat may itself become a basis for legal action. Consumer protection and confusion in Malaysia One of the public policy objectives given for trademark law is consumer protection, that is, to prevent the public from being misled as to the origin or quality of a product or service. A trademark owner also uses trademark law to prevent unauthorized third party use of a mark which is identical to the owners mark, or which is so similar that use of the other party mark would result in a likelihood of confusion.
For example, a computer manufacturer other than Apple which makes products using the APPLE trademark, or a soft drink manufacturer which calls its product 'Popsi' (in imitation of the PEPSI trademark; although the similarity does not need to be this close) may amount to trademark infringement where the owner holds a trademark registration. By identifying the source of goods or services, trademarks help consumers to identify their expected quality and assist in identifying goods and services that meet the individual consumer's expectations. Trademarks also fix responsibility. Without trademarks, a seller's mistakes or low quality products would be untraceable to their source. Therefore, trademarks provide an incentive to maintain a good reputation for a predictable quality of goods. For example, a consumer that purchases and likes Nabisco Premium saltines has a reasonable expectation that Nabisco Premium saltines found anywhere in the United States will be of uniform taste and quality. Failure to maintain consistent quality can lead to abandonment of a mark, when the law will no longer protect the trademark because it has ceased to function as an indicator of a particular product. Marks may also be abandoned by "naked licensing", which involves the owner granting rights to use the mark to another party without sufficiently controlling how or on what they use it. The mark is then released for general use. (see also below under Policing Trademarks)
Because the emphasis is on consumer protection, the user of a trademark does not "own" the mark in the same way that it may own a copyright. With some exceptions (see below under Dilution), the protection of a trademark is limited to certain markets, which can be defined by either the type of product or service (grouped according to the Nice Classification), or even a particular geographic area. For example, though "Lexis" and "Lexus" are confusingly similar marks, using the former for a news and information service and the latter for luxury cars means that the public is not likely to confuse one while looking for the other, and so neither can restrict the other's use. A trademark may also be limited geographically, if it can be determined that products or services do not compete because of the physical separation of their markets. Considering the national and even global nature of most manufacturers and distributors, the reach of print and broadcast advertising, and the disregard of the internet for geographic boundaries, this limitation is likely to be an issue in fewer and fewer cases. The market-specific limitation is not interpreted strictly. Instead, attention is given to how closely related markets are (such as pancake mix and pancake syrup), or how likely it is that the mark owner will "bridge the gap" and move into the other product or geographic market.
Dilution in A trademark is diluted when the use of similar or identical trademarks in other non-competing markets means that the trademark in and of itself will lose its capacity to signify a single source. In other words, unlike ordinary trademark law, dilution protection extends to trademark uses that do not confuse consumers regarding who has made a product. Instead, dilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular product, perhaps imagined if the trademark were to be encountered independently of any product (e.g., just the word Pepsi spoken, or on a billboard).In the U.S., a trademark cannot be sold independently of the underlying goodwill. To allow such a 'sale in gross' would, the courts have said, 'be a fraud upon the public'. Thus, a trademark right can be sold, and a valid assignment made on the trademark registry, only if the conveyance of the mark is accompanying the sale of an underlying asset. Examples of assets whose sale would ordinarily support the assignment of a mark include the sale of the machinery used to produce the goods that bear the mark, or the sale of the corporation (or subsidiary) that produces the trademarked goods.Many countries allow trademarks to be licensed. Under U.S. law, the licensor must monitor the quality of the goods produced under license or risk losing the mark. A license without quality control falls under the doctrine of 'naked licensing' which the courts consider to be a form of abandonment. Trademark licenses are commonly for a limited period and include appropriate warranties of quality by the licensee plus rights to inspect and monitor for quality control by the licensor and Malaysian authorities clearly recognize the scope and seriousness of the optical media
piracy problem. They appear committed to the fight against OD piracy, and in many cases, work ably and willingly with our affected industries. Since 2000, Malaysia has actively raided many pirate optical media production facilities, and 2002 was a seminal year in implementing the inspection and raid provisions of the Optical Disc Act. Working with the motion picture and music industries, MDTCA conducted factory raids from January to December 2002. Twelve of the raids were conducted against licensed factories, while two were against unlicensed plants, and one was against a licensed plant found in a location other than that endorsed on the license. Generally, the machinery found at the unlicensed plants (including seven replication machines, one of which was a DVD line, several printing machines and some “metalisers”),was dismantled and/or seized, while the machinery found in the licensed plants was generally only sealed (or not sealed at all), depending on the evidence found at the plant. The very fact of these raids and the findings of piracy indicate at once the resolve of the Malaysian government to take more concerted action against both licensed and unlicensed plants in 2002, but also the continuing seriousness of the optical disc piracy problem, and the as yet inadequate overall enforcement efforts in Malaysia. These raids will, if past experience holds true, never result in deterrent penalties. It must be noted that not a single optical disc license
has been suspended as a result of these raids, and not a single factory owner has gone to jail or sustained deterrent fines. These facts demonstrate a flawed enforcement system where the guilty often go unpunished. As discussed in detail below, if the Malaysian government is going to have a chance at defeating the optical disc piracy problem, owners of these plants engaging in piracy must be punished with deterrent sentences, including jail time actually served. Until that happens, plant managers and owners will continue to bear the relatively minimal risks of piracya highly Malaysian government added greater resources to the fight against piracy in 2002.In the second quarter of 2002, MDTCA recruited an additional 285 enforcement officers, with160 of those officers reportedly dedicated to an “Anti-Piracy Task Force.” The 160 officers are divided into three teams (an “intelligence team” to learn source information at the manufacturing
level, a “factory team” to conduct plant inspections/raids, and a “retail team” to run domestic raids), of which 100 are in the Klang Valley while 30 are based in Penang and Johore Baru. This placement of enforcement officers is a very positive step aimed at curtailing domestic piracy, and we commend the government for its devotion of manpower and resources. The number of raids grew in 2002 as a result of this greater devotion of resources. For example, between January and November 2002, the motion picture industry, in conjunction with authorities, conducted 20 Internet or export related raids, 82 warehouse raids, and 511 retail raids, including sustained raids in the two most infamous pirate areas in Malaysia (Petaling Street in Kuala Lumpur and Holiday Plaza in Johor Bahru). Unfortunately, these actions have had very minimal impact due to post-raid enforcement problems As noted, there were optical disc factory raids in 2002. Raiding activity against music piracy also picked up, with reports of hundreds of raids run against music pirates. Seizures during raids in 2002 have also increased due to two large-haul raids netting 500,000 pirated discs. In a series of recent raids (from August to November 2002), the motion picture industry was able to thwart thousands of pirated discs from leaving the country. With the increase in the export of illegal optical discs through the mails, industry has been working with the MDTCA in tackling the export problem by
getting the cooperation of the courier companies and National Post, and seminars and meetings have been held to this effect. Two recent courier cases are worthy of mention, in which the Police at Kuala Lumpur Airport stopped pirated products being exported from Malaysia ,arresting two Mauritian attempting to smuggle pirated music, film and software products out of the country. Both were detained by the Police for several days, and immediately went before the court on criminal charges this is the examples about pirating that normally occurs in Malaysia.
a.) The definition of commercial crime also know as white collar crime because people who are doing this Commercial Crime is very educate have degree and PHD . commercial crime also is the are is like Commercial Crime financial loss that can threaten the stability of your business and Commercial Crime will make the person are loss of money, securities or inventory resulting from a variety of external and internal risks like Theft, robbery and safe burglary ,Forgery, alteration of checks, and counterfeit currency ,Disappearance or destruction of money and securities
Employee dishonesty and embezzlement ,Computer and other types of electronic fraud
Commercial crime is typically purchased with other property coverage’s as part of a comprehensive program to protect your business . Commercial crime also know as White collar crime is one the fasted growing and most prevalent problems facing businesses today for Virtually every company like public, private or family owned can be is a potential victim. The cost of a crime loss can financially devastate any business, but for small and mid-s ized organizations in particular - the damage can be fatal. Experts estimate that every year American businesses lose over $100 billion to theft and fraud. Surprisingly, the most costly abuses occur in organizations with less than 100 employees. Technology available today makes the threat of employee theft at every level more ominous than ever before. Seemingly innocent privileges like internet access can become ideal vehicles for crime perpetration.
The example of commercial crime in Malaysia si like Theft, Robbery ,Safe Burglary, Embezzlement ,Counterfeit currency ,Computer Fraud ,Forgery ,Wire Transfer ,Investigation Expense ,Employee Dishonesty and others a lot of commercial crime happen in Malaysia Theft, Disappearance and Destruction Theft means any act of stealing. Disappearance is unknown causes of loss. Disappearance lacks the elements of knowing if the crime was a theft, burglary or robbery. Destruction is the loss of certain property, it is usually the result of another cause of loss and money and securities against loss by theft, disappearance, or destruction inside the premises and also money and securities outside the premises in the care and custody of a messenger this is the example of commercial crime in Malaysia and have more like Robbery is the taking of property from a person by the threat of personal injury to that person and Safe Burglary is a specific kind of burglary that means the taking of property from a safe or vault which shows visible signs of forcible entry. Theft is also robbery act of stealing one's property and document of profitable use and theft also like burning or do something can cause a loss their money because people like good example is Piracy this is one of examples of stealing because they for examples XERINA is make pirate copies VCD and arties will not get profit because Xerina make pirate copy sale to people so the people by the piracy VCD so this the Theft and stealing this all are real thing happen in Malaysia.
In Malaysia also happen fraud it mean Computer Fraud is a specialized kind of theft where a computer is used to steal property from it's rightful owner. Like examples VERNICA and ALEX is working in one computer company is name is Dell this one of computer commercial crime it happen like this they working in this caompany also stealing computer logo is "DELL " and parts of computer also they stealing and after then VERNICA and ALEX quit form they dell company and go to CHINA and make their own computer with logo of Dell is call commercial crime this also call Employee dishonesty is considered to be a criminal act committed by an employee acting alone or in collusion with others like VERNICA and ALEX There must be intent by the employee to cause the employer a loss and to obtain a financial benefit for the employee or someone else computer Fraud is also hacking into computer system's of others company and stealing vabable information
This is some of kind of commercial crime also happen in Malaysia and others country also.
· Cheque frauds, which involve the theft and/or alteration of otherwise legitimate cheques, the theft of blank cheque forms and their fraudulent use, the forging of cheques, or the recycling of already used cheques back through the banking system. Perhaps the most common type of fraud committed is the signing of a cheque in the knowledge that the drawer does not have sufficient funds available.
· Credit card frauds include the use of stolen/lost credit cards, the ‘skimming’ of the electronic data stored on a card’s magnetic strip and copying it onto another card, or the use of the number of the card belonging to another person in the electronic or telephonic purchase of goods.
· Advance fee frauds, including the so-called Nigerian Letters (or 419 scams), are premised on offering the victim a role in a legitimate or illegitimate business deal. All that the victim need do is provide some start-up capital or to contribute to the initial costs of the venture. Of course, nothing ever comes of the deal and the victim loses her contribution.
· Kite-flying frauds, in which a series of transactions are entered into with a bank or banks in order to induce the bank to believe that real funds have been deposited into an account and to have the balance cleared prior to the validation of the original deposits. The funds are then removed from the account before the bank realizes that no real deposit was made.
· Other very typical frauds include a variety of frauds committed by individuals against their employers (e.g. by massaging expense accounts, embezzling funds or colluding with the organization’s suppliers) or by individuals against medical aids and insurance companies by over-claiming, sometimes colluding with service providers to do so.
· Investment’ schemes in which individual investors are persuaded to have a company invest funds on their behalf. These funds are then stolen by the staff or directors of the investment company. Another version of this crime is when insurance brokers fail to pay the insurance premiums of their clients/victims over to the underwriter. Some investment frauds evoke shades of pyramid schemes.
· Ponzi or pyramid schemes offer high returns to investors by transferring funds from new recruits to existing recruits. The new recruits then have to go out and recruit more ‘investors’ to recover their original payment and make a return. These schemes are illegal because they inevitably run out of recruits, bringing the scheme to a grinding and traumatic close.
· Trading schemes involve at least two colluding ‘investment companies’. Here, instead of running off with the clients’ capital, the two companies transact unnecessarily, each earning unnecessary commissions.
· Companies sometimes obtain loans or attract investors on the basis of misleading or false financial statements, or on the basis of non-existent or valueless collateral, or raise multiple loans using the same collateral. Indeed, in some cases, forged letters of credit are used to secure funds.
· Again, companies are often involved in numerous other kinds of fraud including insurance fraud, making fraudulent deductions from employees’ salaries, as well as tax and tax rebate frauds.
· The non-payment of suppliers is also a common source of commercial crime, and, while there have been instances in which the business was established in order to profit from unpaid supplier credits, generally these cases begin when businesses begin to go under and the directors try to postpone the inevitable.
This is a definition of commercial crime and the examples of commercial crime in Malaysia this commercial crime not only happen in Malaysia also around the world . commercial crime is do by some one who very good in cheating ,in talk, have some friend to help in doing the commercial crime.
b) commercial crime still happen even though government already take responsibility to avoid this problem it because The commercial crime still happen even though government already take their responsibility to avoid this problem but why this crime still happen it because the Profit and money if do the commercial crime that person are doing the business get high profit so because that this commercial crime still happen government have rules and regulation for all this but this happen it because the Money thay get in very fast and a lot for examples “skim cepat kaya” one of them like Verex is doing this “skim cepat kaya” because he will get big profit and a lot of money form doing this .He do this bussines because he get money in short time because he doing this business even is it is wrong form our government have rules and regulation say cannot do this kind of business so Verex are doing commercial crime even Malaysia government are not allow this type of business doing in Malaysia .
Commercial crime still happen in Malaysia like one men say he is form TNB (tenaga National Berhad) to the one factory managers and the person say the company are curi electric and he want sue the company if the company don’t sue form TNB he ask the company managers to give money to him the person because he that person can close this case after all this the company managers never give the money and call TNB and ask the TNB are they send any person to the company and after the TNB answers they never send anybody to the company so this person are doing the Commercial crime for what to get money for that he doing this kind of Commercial crime and this kind of Commercial crime still happen in Malaysia this is the example why Commercial crime still happen in Malaysia it because some people want money a lot but they lazy to work then they this kind of Commercial crime this is the reson why Commercial crime still happen in Malaysia.
a) Malaysia have a lot some bank and financial bank and Malaysia also have Islamic financial already exist in malaysia a few years ago this system are follows the Islamic rules in running their business. The features of Islamic banking is Islamic banking refers to a system of banking or banking activity which is consistent with Islamic law (Sharia) principles and guided by Islamic economics. In particular, Islamic law prohibits the collection of interest, also commonly called riba in Islamic discourse. One form of the argument against interest is that money is not a good and profit should be earned on goods and services only; not on control of money itself it also offer Islamic banking products and services under the Islamic Banking Scheme (IBS). These institutions however, are required to separate the funds and activities of Islamic banking transactions from that of the conventional banking business to ensure that there would not be any co-mingling of funds. However, in this fast moving world, more than 1400 years after the Prophet (s.a.w.), can Muslims find room for the principles of their religion? The answer comes with the fact that a global network of Islamic banks, investment houses and other financial institutions has started to take shape based on the principles of Islamic finance laid down in the Qur'an and the Prophet's traditions 14 centuries ago. Islamic banking, based on the Qur'anic prohibition of charging interest, has moved from a theoretical concept to embrace more than 100 banks operating in 40 countries with multi-billion dollar deposits One form of the argument against interest is that money is not a good and profit should be earned on goods and services only, not on control of money itself. Economists, however, believe that interest is a natural phenomenon, and one can indeed see from an economic perspective that Islamic banking is based on interest banking, in the sense of compensating investors for the time value of money While Islamic law prohibits the collection of interest, it does allow a seller to resell an item at a higher price than it was bought for, as long as there are clearly two transactions.
Examples of financial institution that uses Islamic rules in running their business is Perbadanan Wang Simpanan Bakal-Bakal Haji (PWSBH) was set up. PWSBH was set up as an institution for Muslims to save for their Hajj (pilgrimage to Makkah) expenses. In 1969, PWSBH merged with Pejabat Urusan Haji to form Lembaga Urusan dan Tabung Haji (now known as Lembaga Tabung Haji) a
Bank Muamalat has continuously reaffirmed its commitment towards becoming a progressive, leading player in Islamic Investment Banking. Starting from humble beginnings of a two-person department, our Investment Banking Department (IBD) has now grown from strength to strength.Comprising a team of multi-disciplinary, experienced professionals, Bank Muamalat is a leading - edge innovator in the provision of new financial solutions in both the equity and debt capital markets, project and structured financing and corporate advisory and consultancy services. This innovativeness is further strengthen via the strong and continuous support of our forward thinking Syariah experts, who ensure that every product and service that we provide is permissible according to the tenets of Islam.Whatever financial decision or requirement you may be currently facing, we at IBD would like to assist you in achieving those needs, via the harnessing and provision of our unbiased, objective and precise financial advice and services.Together, we can achieve this via our strong client relationships and fast delivery service, ensuring that you obtain maximum effectiveness in exploiting new opportunities. Improving financial performance whilst managing risks to enhance shareholder value is how we help clients. We help clients address the most complex of business and financial challenges in today's competitive business environment by drawing on our various skill sets, expertise and vast network.
The first Islamic bank in Malaysia was established in 1983. In 1993, commercial banks, merchant banks and finance companies were allowed to offer Islamic banking products and services under the Islamic Banking Scheme (IBS). These institutions however, are required to separate the funds and activities of Islamic banking transactions from that of the conventional banking business to ensure that there would not be any co-mingling of funds.In Malaysia, the National Syariah Advisory Council additionally set up at Bank Negara Malaysia (BNM) advises BNM on the Shariah aspects of the operations of these institutions, as well as on their products and services.In June 2005, Dow Jones of New York and RHB Securities of Kuala Lumpur, teamed up to launch a new "Islamic Malaysia Index" ¡ª a collection of 45 stocks representing Malaysian companies that comply with a variety of Sharia-based criteria. Three variables (the total debt of an indexed company, its total cash plus interest-bearing securities and its accounts receivables) must each be less than 33% of the trailing 12-month average capitalization, for example.
b) The first Islamic bank in Malaysia was established in 1983. In 1993, commercial banks, merchant banks and finance companies were allowed to offer Islamic banking products and services under the Islamic Banking Scheme (IBS) and the principles of Islamic financial in Malaysia is Islamic banking has the same purpose as conventional banking except that it claims to operate in accordance with the rules of Shariah, known as Fiqh al-Muamalat (Islamic rules on transactions). The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of riba´ (interest). Amongst the common Islamic concepts used in Islamic banking are profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah) and leasing (Ijarah).
In an Islamic mortgage transaction, instead of loaning the buyer money to purchase the item, a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while allowing the buyer to pay the bank in installments. This higher cost represents the bank charging the debtor in order to compensate for the time value of money; in other words, this higher cost is exactly the essence of interest. However, the fact that it is interest cannot be made explicit and therefore there are no additional penalties for late payment. In order to protect itself against default, the property itself remains under the ownership of the bank until the mortgage is paid in full (in the event of a default, the property remains under the bank's ownership and may be sold by the bank). This arrangement is called Murabaha. Another approach is Ijara wa Iqtina, which is similar to real estate leasing. Islamic banks handle loans for vehicles in a similar way (selling the vehicle at a higher-than-market price to the debtor and then retaining ownership of the vehicle until the loan is paid).
In business deals, there are several other approaches to implicitly compensating for the time value of money. Islamic banks lend their money to companies by issuing floating rate interest loans. The floating rate of interest is pegged to the company's individual rate of return. Thus the bank's profit on the loan is equal to a certain percentage of the company's profits. Once the principal amount of the loan is repaid, the profit-sharing arrangement is concluded. This practice is called Musharaka. Further, Mudaraba is venture capital funding of an entrepreneur who provides labor while financing is provided by the bank, so that both profit and risk are shared. Such participatory arrangements between capital and labor reflect the Islamic view that the borrower must not bear all the risk/cost of a failure, as it is Allah who determines that failure, and intends that it fall on all those involved.
Last, but not least, Islamic banking is restricted to Islamically acceptable deals, which exclude those involving alcohol, pork, gambling, etc. Thus ethical investing is the only acceptable form of investment, and moral purchasing is encouraged.Islamic banks have grown recently in the Muslim world but are a very small share of the global economy compared to the Western debt banking paradigm. Micro-lending institutions such as Grameen Bank use conventional lending practices, and are popular in some Muslim nations, but are clearly not Islamic banking.
Shariah Advisory Council/Consultant
Islamic banks and banking institutions that offer Islamic banking products and services (IBS banks) are required to establish Shariah advisory committees/ consultants to advise them and to ensure that the operations and activities of the bank comply with Shariah principles.
In Malaysia, the National Syariah Advisory Council additionally set up at Bank Negara Malaysia (BNM) advises BNM on the Shariah aspects of the operations of these institutions, as well as on their products and services. (See: Islamic banking in Malaysia)
Concepts In Islamic Banking
Wadiah (Safekeeping)
In Wadiah, a bank is deemed as a keeper and trustee of funds. A person deposits funds in the bank and the bank guarantees refund of the entire amount of the deposit, or any part of the outstanding amount, when the depositor demands it. The depositor, at the bank's discretion, may be rewarded with a 'hibah' (gift) as a form of appreciation for the use of funds by the bank. In this case, the bank compensates depositors for the time-value of their money (i.e. pays interest) but refers to it as a "gift" because it does not officially guarantee payment of the gift.
Mudharabah (Profit Sharing)
Mudharabah is an arrangement or agreement between a capital provider and an entrepreneur, whereby the entrepreneur can mobilise funds for its business activity. Any profits made will be shared between the capital provider and the entrepreneur according to an agreed ratio, where both parties share in profits and only capital provider bears all the losses if occurred. The profit-sharing continues until the loan is repaid. The bank is compensated for the time value of its money in the form of a floating-point interest rate that is pegged to the debtor's profits.
Musharakah (Joint Venture)
This concept is normally applied for business partnerships or joint ventures. The profits made are shared on an agreed ratio, while losses incurred will be divided based on the equity participation ratio. This concept is distinct from fixed-income investing (i.e. issuance of loans).
Murabahah (Cost Plus)
This concept refers to the sale of goods at a price, which includes a profit margin agreed to by both parties. The purchase and selling price, other costs and the profit margin must be clearly stated at the time of the sale agreement. The bank is compensated for the time value of its money in the form of the profit margin. This is a fixed-income loan for the purchase of a real asset (such as real estate or a vehicle), with a fixed rate of interest determined by the profit margin. The bank is not compensated for the time value of money outside of the contracted term (i.e. the bank cannot charge additional interest on late payments), however the asset remains in the ownership of the bank until the loan is paid in full.
Bai' Bithaman Ajil (Deferred Payment Sale)
This concept refers to the sale of goods on a deferred payment basis at a price, which includes a profit margin agreed to by both parties. This is similar to Murabahah, except that the debtor makes only a single installment, on the maturity date of the loan.
Wakalah (Agency)
This occurs when a person appoints a representative to undertake transactions on his/their behalf, similar to a power of attorney.
Qardhul Hassan (Benevolent Loan)
This is a loan extended on a goodwill basis, and the debtor is only required to repay the amount borrowed. However, the debtor may, at his or her discretion, pay an extra amount beyond the principal amount of the loan (without promising it) as a token of appreciation to the creditor. In the case that the debtor does not pay an extra amount to the creditor, this transaction is a true interest-free loan. Some Muslims consider this to be the only type of loan that does not violate the prohibition on riba, since it is the one type of loan that truly does not compensate the creditor for the time value of money [3].
Ijarah Thumma Al Bai' (Hire Purchase)
There are two contracts involved in this concept. The first contract, Ijarah contract (leasing/renting) and the second contract, Bai' contract (purchase) are undertaken one after the other. For example, in a car financing facility, a customer enters into the first contract and leases the car from the owner (bank) at an agreed rental over a specific period. When the lease period expires, the second contract comes into effect, which enables the customer to purchase the car at an agreed price. In effect, the bank sells the product to the debtor, at an above market-price profit margin, in return for agreeing to receive the payment over a period of time; the profit margin is equivalent to interest earned at a fixed rate of return. This type of transaction is particularly reminiscent of contractum trinius, a complicated legal trick used by European bankers and merchants during the Middle Ages, which involved combining three individually legal contracts in order to produce a transaction of an interest bearing loan (something that the Church made illegal).
Bai' al-Inah (Sell and Buy Back Agreement)
The financier sells an asset to the customer on a deferred payment basis and then the asset is immediately repurchased by the financier for cash at a discount. The buying back agreement allows the bank to assume ownership over the asset in order to protect against default without explicitly charging interest in the event of late payments or insolvency.
Hibah (Gift)
This is a token given voluntarily by a debtor to a creditor in return for a loan. Hibah usually arises in practice when Islamic banks voluntarily pay their customers interest on savings account balances.