Choosing A Name

Choosing a Name for Your Canadian Corporation, Partnership or Sole Proprietorship

When choosing a name for your Canadian corporation, partnership or sole proprietorship you need to ensure that your name is distinct and different from any other registration on file federally and in all provinces and territories across Canada. In order to determine this you will need to perform a preliminary name search. Before performing a preliminary name search you should read the following information.

 

Aspects Required When Choosing a Name for Your Business

If you are registering a corporation, you will be required to have a legal element (explained below) but for other registrations such as sole proprietorships, business names and partnerships this will not be necessary. The information herein explains what to look for when using a name for a corporation however the principles can be applied to business names, partnerships and sole proprietorships as well.

When deciding on a name for your corporation, you should consider three aspects of the name as follows:

(1) the Distinctive Element

(2) the Descriptive Element, and

(3) the Legal Element.

 

  • Distinctive Element

  • Vancouver

  • Dominique's

  • Butterwind

  • Descriptive Element

  • Lawn Mowing Services

  • Graphics Design

  • Wind Surfing Instruction

  • Legal Element

  • Ltd.

  • Corp.

  • Inc.

 

Distinctive Element of a Name – If the name you choose to register is “Crosgrey Carpentry Inc. , the distinctive element is the word “Crosgrey”, which is distinctive because it is my last name. Another example of a distinctive element in a name might be “Grenville” as in “Grenville Garden Supplies Ltd.” which is distinctive because it describes a location. “Starcross Dental Services Corp.” has the distinctive word “Starcross” in it to make it stand out from other dental service companies.

Descriptive Element of a Name – The descriptive element describes the type of business. In “Crosgrey Carpentry Inc.”, the descriptive element is “Carpentry” which describes the nature of business. In “Grenville Garden Supplies Ltd.” the descriptive element is “Garden Supplies” which describes the type of products this business sells. “Dental Services” is the descriptive element for “Starcross Dental Services Corp.”.

If you were to use the name “Starcross Ltd.” it does not describe the type of business. You can incorporate this company, if the name is available, but because it is such a short name there may already be a conflict and it would not be suggested to register such a short name. There are 1,000s of these short names registered already and most of them are already taken. Let us consider that “Starcross Inc.” has been registered. When you do a preliminary name search on the name “Starcross Ltd.” the name search report says “Starcross Ltd.” is available. This would still be a very poor choice of name since the person who owns the company registered as “Starcross Inc.” would consider your name as a conflict even though the government in some jurisdictions would allow you to register the name because it is different and not exactly the same. The onus is on you to ensure your name is distinct and different from others, not the government. In fact in some provinces such as Alberta and Ontario you can register a business name, sole proprietorship or partnership with the exact name as other registrations. This is not a requirement for them so if you do not pre-clear your name in advance they will not inform you before registering of any other names that would be a conflict. The only requirements in those provinces for distinct names would be for incorporations.

Purchase NUANS or Name Search Report for a New Business

It is best to have a descriptive element in the name to avoid any future conflicts that you may not be aware of when you register your company especially if you are performing your own searches without the help of a search house. Search houses are trained to look for conflicts such as this and it is your best option to have a search house check your name. For the low cost it is worth being safe. You could be forced to change your name if a company took you to court for this issue. If they have had use of their name for many years and are highly placed in the marketplace, they might be able to force you to change your corporation’s name. This would then mean that, even though you have built up a relationship with your clients using the name you first chose, you might be forced to change it and thereby lose some of your standing in the marketplace. The loss of income and the additional expenses resulting from such a situation could be high. Therefore, it is important your corporation’s name is very distinct and different from other names of existing companies across Canada. This would include any companies registered in Canada whose home base is outside of Canada. As well, never order stationery, business cards, etc. before your company is incorporated.

Legal Element of a Name – The Legal Element is the word “Inc.” which is a mandatory ending which recognizes the name as the name of a company. In Canada you can have the following endings for your company name: “Inc.”, “Incorporated”, “Ltd.”, “Limited”, “Corp.”, “Corporation” and the French equivalents of “Ltee.” “Limitee”, “Inc.” (same in English and French) or “Incorporee”, The Legal Element distinguishes your name as a share corporation rather than a business name, sole proprietorship or non-share corporation.

It is best to consider a name that has a minimum of four words. Otherwise, you may choose a name that is too close to another existing corporation’s name.

Need Our Help?

Register a Sole Proprietorship

Register a Partnership

Register an Operating Trade Name

Preliminary Name Searches

You should always do a preliminary name search prior to obtaining a name search report or a NUANS name search report.

The distinctive element of a name can be your name, i.e. “John Smith” or it might be a group of letters, i.e. “GSA” or it might be the name of a town, “Newmarket”, etc. The more distinct the name, the more likely it will be that the name will be available for use.

The descriptive element of the name should be very broad and detailed. The more detailed your descriptive element is the more likely your name will be different than others. For instance, using the descriptive element “Services” is vague but the use of the descriptive element “Dry Cleaning Services” is broader. The descriptive element “Dry Cleaning and Clothing Repair Services” would be even better.

Choosing a Name for a Quebec Company

If you are going to carry on business in Quebec then you will need a French name,. The name can be the name of the company or an English named company with a French business name. If you chose you can have an English and a French name in your articles. You will need two NUANS reports when incorporating. One for the English version of the name and one for the French version of the name.

Ontario Operating Trade Names

Registration Requirements for Ontario Operating Trade Names

This article is about the requirement under the Business Names Act (Ontario) for a company to register under the Business Names Act when it operates under a name other than its corporate name – known as an Ontario operating trade name.

The statute indicates in section 2 that no corporation shall carry on business or identify itself to the public under a name other than its corporate name unless that name is registered by the corporation.

Register an Operating Trade Name

This legal requirement is frequently not followed correctly by small business corporations.  Let us take the example of a person who incorporates a company called Trewell Landscaping Inc.  He incorporates his company and wants to put a sign up on his door for the name “Trewell Landscaping”.

 

Trewell Landscaping - No Inc.

 

This is not the full name of the company and Trewell Landscaping Inc. is therefore operating under a name other than its corporate name and is in violation of the Business Names Act.

The owner of Trewell Landscaping thinks that because his corporate name and his business name are similar, that a registration is not required.  However, by virtue of the owner putting up a sign on his door called Trewell Landscaping he is in violation of the legal requirements under the Business Names Act.

 

The owner of Trewell Landscaping Inc. has two options.  He can register an operating trade name called “Trewell Landscaping” and obtain a Master Business License for this name.  This would mean that Trewell Landscaping Inc. would then be legally operating under the trade name “Trewell Landscaping” and the above sign is completely correct and legal.

 

If he does not wish to incur any further expense he can include the word “Inc.” at the end of the name “Trewell Landscaping” in very small letters after the name on his sign.

 

Trewell Landscaping Inc.

 

Resources for Canadian Business Owners would be glad to assist you If you require the registration of an Ontario operating trade name on behalf of your company to help you stay in compliance with the Ontario Business Names Act.

Below is an example of the Master Business Licence that is issued by the Ontario Ministry of Government Services when a company registers a business name.  This example illustrates how the name is registered without the “Inc.” in the name which allows the corporation to now operate under Trewell Landscaping.

 

Master Business License