Number Name
Incorporation is permitted under a number, with the number being determined by Industry Canada. The result will be something like 234567 Canada Inc. The use of a number name can make incorporation quicker. We don’t recommend a number for companies that are doing business with the public as many people are suspicious of numbered companies. However, you can incorporate under a number and then carry on business with a name, provided you register your name under the Business Names Act of the relevant province where you are carrying on business.
Elements of a Corporate Name
Generally, a corporate name consists of three elements:
- a distinctive element which helps to distinguish the corporate name from that of other businesses. Two good examples are a surname and a made-up word.
- a descriptive element which describes the nature of the business, such as Consulting, Gardening, or Trucking
- a mandatory legal element, such as Incorporated, Inc., Limited, Ltd., etc.
Confusing Corporate Names
In order to avoid confusion in the market place and to protect the consumer, all jurisdictions in Canada regulate corporate names, but the degree to which they do so varies widely. The strictest standards are used by the federal government. For a Canada incorporation, the proposed name must not be the same as or similar to that of any known entity, if the use of that name would be likely to deceive the public.
Incorporation Does Not Protect Your Name
When the business is incorporated, the government is merely acknowledging the ‘birth’ of a new legal entity – the corporation. The government is not guaranteeing that you have the right to use that name. It’s up to you to pick a good name, and if someone else doesn’t like your name later, it’s your problem, not the government’s. This is quite clear in one of the government’s documents.
It is not incorporation that protects the corporate name. The corporation, just like any natural person, has the ‘common-law’ right to prevent others from trying to ‘pass-off’ their goods and/or services as coming from the corporation. But this is based on the name and reputation of your business, and not on its incorporation. If a dispute develops with another business, the ‘common-law’ rules apply. The date of incorporation is not conclusive. The most effective way of protecting a name is by trademark, and registering the trademark provides the best protection. Click over to our sister site for more information on Canadian trademarks.
NUANS Name Search
The federal government requires that a Canada-biased NUANS name search report be submitted with every application for a named corporation. NUANS stands for Newly-Automated Name Search, and is a report that searches for potentially confusing name of federal, provincial and territorial businesses as well as trademarks. Please note that Industry Canada will not accept NUANS reports from other jurisdictions.
Use of Corporate Name
Upon being incorporated by the Ontario government, your corporate name is automatically registered in the list of businesses doing business in Ontario. This is what is commonly known as ‘registering’ the corporate name. All it means is that your name has been registered in Ontario. It does not mean you have the right to carry on business in Ontario under that name. If you do business outside Ontario, you are generally required to register your name in that province. Please note that your request to do business under that name may be refused, depending on the jurisdiction.
If you are a federal corporation doing business in a province, then you are required to register under the Business Names Act as an extra-provincial corporation.