Names of companies in Canada
When you apply to incorporate a company under the Canada Business Corporations Act, you may choose to use a corporate name or have a numbered name assigned to you. Although incorporating under a name involves additional effort and expense, there are advantages to doing so.
A corporate name is an important part of corporate communication and advertising today and can be a very valuable asset. It tells people who you are and will often represent the goodwill that you have built up with your customers and suppliers.
An approved federal corporate name offers an extra degree of protection of your rights to that name. Specifically, federal incorporation allows your business to operate using its corporate name right across Canada, which is important if you decide to expand your business to other provinces or territories.
Choosing A Name
Your name must meet certain requirements before it is approved by Corporations Canada:
- The name must be distinctive.
- The name must include a legal element.
- The name must not include unacceptable terms.
It must be easy to distinguish your proposed name from the names of other businesses that carry on the same activities. Your name will not be distinctive if it merely describes those activities. The name "Car Manufacturer Inc." lacks distinctiveness since it describes the activities of all car manufacturers.
You can achieve distinctiveness in a number ways. One of the most common is to include an element that makes it distinctive. "Carwash Incorporated, " for example, is too general, but "East Side Carwash Incorporated" is distinctive.
Made-up words also give a name distinctiveness. They can be a combination of two dictionary words such as "Infotech" or something completely new such as "Xerxos." Unusual names are highly distinctive and are given greater protection because they are unique.
Confusion with other names or trade-marks
For many people, the prospect of discovering that their business name may be confused with another is intimidating. This is particularly true if you have invested considerable time and effort in coming up with a name or have been operating under the proposed name for some time before incorporating. The federal name approval process helps you to avoid this problem by identifying potentially confusing names or trade-marks in a federal database of names and ensuring that you satisfy yourself that confusion is not likely.
In assessing possible confusion, Corporations Canada looks at all circumstances, including a comparison of the goods, services and operating area of your proposed business with those of existing businesses. While name approval from Corporations Canada does not guarantee that you are not violating the rights of another firm or individual, it significantly reduces your risks.
You must submit a Nuans Name Search Report as part of your application to use your corporate name. A Nuans search compares your proposed name with a federal database of names that includes trade-marks, provincial and federal corporate names and most provincially registered business names (except corporate and business names in Quebec).
The accepted way to include a legal element in a corporate name is to add a term to the end of the name such as Limited, Incorporated or Corporation, or contractions of these such as Ltd., Inc. or Corp.
Unacceptable terms fall into three categories. First, there are terms that imply connections that do not exist. Your corporate name cannot suggest, for example, that you are a branch of the government or that you offer services or products governed by financial legislation, such as trusts, loans, insurance and banking.
The second type of unacceptable term is one that falsely describes your business. You cannot, for example, include terms that suggest that your company is selling cars when it is really selling only tires.
Finally, obscene terms or terms that suggest that your business provides obscene, scandalous or immoral services are not allowed.
Applying For A Corporate Name
The most important part of your name application is a Nuans Name Search Report. There are several types of Nuans reports and the one you need for federal incorporation is a Canada-biased report. A Canada-biased report means that the proposed name was searched against all the names found in the database, not just names registered in a particular province.