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.
Your name must meet certain requirements before it is approved by
Corporations Canada:
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The name must be distinctive.
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The name must not cause confusion with any existing name or
trade-mark.
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The name must include a legal element.
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The name must not include unacceptable terms.
Distinctiveness
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
It is to your advantage to learn about potential name conflicts as soon
as possible. If your name is too close to an existing corporate name
or trade-mark, the owner of that name or trade-mark could launch a
court action to compel you to stop using your name and perhaps even to
pay damages.
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® (Newly Upgraded Automated 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).
Legal element
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
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.
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The most important part of your name application is a NUANS® 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.
A NUANS® report may be obtained in two ways. First, you can order a federal
NUANS® report on-line. The fee is $20 payable by credit card (American Express®, Diners Club®, Mastercard® or Visa®). The system provides direct access to the NUANS®
search service. You will have to ensure that you understand
the regulations and policies which have to be met before the name will be approved by Corporations
Canada. A Corporations Canada publication
Name Granting Guidelines features
more information about the requirements for corporate names. This brochure, as well as other
relevant information, can be accessed from the
Corporations Canada's website in the "Choosing A Name" section.
A NUANS® report may also be requested from a private company known as a search house.
A search house is an independent, private sector business that can provide advice on the availability of
your corporate name choice. Both a search house list and the NUANS® on-line search service can be
accessed from the Corporations Canada's website in the "Choosing A Name" section.
The NUANS® report is valid for 90 days. If you do not submit your
application for incorporation within that period, you must get a new
report.
You may submit your proposed name along with your application for
incorporation or you may ask, by fax or E-commerce, for pre-approval
of your proposed name. If you choose to submit your name along with
your complete application, please be aware that if Corporations Canada
rejects your proposed name, the entire application will be refused. A
pre-approved name can prevent this situation from happening. There is
no fee for this service. Send your application via fax to (613) 941-5782, or
through the Corporations Canada On-line Filing Centre.
Your application for pre-approval or for incorporation should be as
complete as possible. If your first application is rejected, you may
reapply with additional information later, but it is easier, and less
expensive, to include all the relevant information the first time.
Information considered relevant includes descriptions of your product
or service, your customers and where your business will operate.
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The name approval process does not guarantee protection against names
or trade-marks existing at the time the name is approved. While the
NUANS® search report is usually very reliable, the NUANS® system is not
foolproof. The responsibility for ensuring your business name does not
infringe on the rights of others is yours alone. It is also up to you
to make sure that no new business names or registered trade-marks
infringe on your rights.
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Generally, names for federal not-for-profit corporations must meet the
same requirements as for federal business corporations except the
legal element requirement. However, not-for-profit names may receive a
slightly more liberal interpretation with regard to distinctiveness
since they are typically more general and descriptive than business
names.
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Can I use my own name in the corporate name?
Yes, personal names are sufficiently distinctive and are acceptable in
a corporation's name. Generally, however, you cannot use your name
alone as the name of the corporation. "Jill Jones Ltd." is
not acceptable but "Jill Jones Consulting Ltd." is. No
consent is required if you are signing the incorporating documents or
if you will be a director of the new corporation. Otherwise you will
have to provide such consent.
My business already has a name but is not incorporated. Can I
continue to use this name if I apply for federal
incorporation?
All corporate names must satisfy the federal corporate name
requirements. However, this does not prevent your corporation from
carrying on business using the present name in the province where the
name is registered.
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The following publications and forms are available free from
Corporations Canada Information and Publication Unit at 1-866-333-5556
or on our websitein the "Choosing a Name" section.
No publication or information issued by Corporations Canada is
intended to replace professional advice.
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