Naming a business is more important than most people realize. Everything you purchase has a brand name attached to it, from the clothing you wear to the groceries you buy - everything has a name that the company took pains to think up. A name is an important marketing tool that should come to the mind of consumers at the time of purchase. If a name is hard to pronounce, too long or easily forgettable, the consumer will likely purchase the product or service of another company. As well, consumers quickly forget names that are difficult or confusing.

Five criteria to keep in mind when naming your company:

A name must be distinctive, credible and memorable.
The name must not cause confusion with any existing name or trademark.
The name must include a legal element.
The name must not include unacceptable terms.
The name should be transcultural.

Confusion with other names or trademarks:
If your name is too close to an existing name or trademark, the owner of it could launch a court action in order to get you to stop using the name. It is in your best interest to avoid this situation as by this time you will probably have invested much time, effort and money both choosing and advertising a name. The federal name approval process helps you to avoid this problem by identifying potentially confusing names or trademarks in a federal database of names, thus ensuring that confusion is not likely. Name approval from the Corporations Directorate does not guarantee that you are not violating the rights of another firm, but it significantly reduces your risks.

Legal Element:
The accepted way to include a legal element in a corporate name is to add a term such as Limited (Ltd.), Incorporated (Inc.), or Corporation (Corp.) to the end of the name. All names have to be legally registered, which involves searches to ensure that another company has not already taken the name.

Unacceptable terms:
The name you choose for your company cannot suggest that you are a branch of government or that you have the approval by some unit of government; i.e. names containing "Parliamentary, Premier's or Legislative" would very likely be rejected. Also, you cannot name your company something that misleads your customers by falsely describing your company. Finally, you cannot use obscene terms, or terms that suggest that your business provides obscene, scandalous, or immoral services.

Transcultural:
It is important to think global when naming a company in the event that your company expands to compete in the international market. It may seem too long-term or unlikely at the present, but it is a possibility. Different names have different meanings in other cultures, therefore, it would be advisable to do some investigating before you register your name. If you don't take the time to come up with a proper name initially, you may be faced with renaming your company in the future. You will also want to check that your name has no unfriendly connotation in any other language as it could offend customers from another country and put a halt to your business dealings. A well-known example of this is the sale of a car called the GM Nova in Spanish-speaking countries. "No-Va" means "no go", therefore, you can imagine that this car was not a big seller in a number of countries. There are countless names of companies and brands that learned this lesson the hard way. Be sure to do research and ensure that this does not happen to you.

Naming techniques used in the past:
There are a number of naming techniques that have been used frequently in the past. We will explore any advantages and disadvantages attached with these techniques.

1) Using Surnames:
Naming a business after oneself has been used frequently in the past. For example, Ford, Kraft, and Heinz are all named after their founders. This method continues to be a popular naming technique, however, there are a few potential disadvantages. Your personal reputation could be tarnished should you experience financial problems or bankruptcy. Also, in the event that you sell your company, your name would go with it. The new owners actions could negatively affect your reputation. On the flip side, public embarrassment by you, the founder, could damage the company name and have an adverse affect on your company. Also, when the founder dies or is absent from the company, this can create confusion among the public.

2) Geographic Names:
Using the name of a city, province or territory in a company name can be surprisingly limiting in the event that the company expands to serve other geographical regions. For example, names such as Alberta Logging or Edmonton Clothiers can seriously limit the company as it implies a geographic limitation, it is hard to transfer across borders, and it can create confusion.

3) Descriptive Names:
Names that describe the nature of a company can get long and cumbersome. A name will not be distinctive if it merely describes the nature of the businesses activities. For example, a name such as International Communication Corporation describes the company but does not roll off the tongue easily and is not very distinctive or memorable. With all the clutter in today's society, a name is only effective if it is unique. Some companies that started off with descriptive names turned to initials to shorten up the name. International Business Machines became IBM. Although this technique worked well for them, it is not necessarily advisable to do this as initials escape the memory easily.

Words bearing no relationship to the company have been used often as well. For instance, Apple Computers or Carnation Foods have become household names because they are so well known, however, because this method of naming bears no resemblance to the product or service offered, it may not initially stick in the consumers mind (This is where advertising comes into play).

4) Coined Names:
Coined words are names which are composed through fabrication, through the combination of words, or by combining the first initials of a phrase to make a word. These names are increasingly popular as they have no dictionary meaning and can be transferred to any type of business. The advantages are that they are unlimited in scope and language and they are completely proprietary. Made-up words give a name distinctiveness and are given greater protection because they are unique.

Examples:
Kodak - Was created to be pronounceable in as many languages as possible.
Telus - Was created by combining "telecommunications" and "universality".