June 17, 2010
Advice On How To Pick A Name Before Incorporating A Company
Before you can incorporate a company in Canada, no matter what province or territory you live in, you will be required to provide some form of name search and as well, you might also be required to provide a name search to register a proprietorship, business name or a partnership.
A preliminary name search is a pre-check of a proposed company name, business name or sole proprietorship name before you order your full Nuans name search report or other similar name search. Having a preliminary name search done prior to ordering a full search can save money in the long run.
The government reviews the full name search report to ensure there are no conflicts before it allows you to register your business. Some Canadian jurisdictions such as the federal jurisdiction will reject a name even if it sounds like another name and is spelled differently.
When you order a Nuans Name Search or name search report with a search house normally the search house will do a preliminary name search as part of the service. You should ask this in advance or confirm this on the website of the search house. You should not have to pay for both a preliminary and a full name search separately. The only time a preliminary name search should be paid for separately is if you are registering a business name, proprietorship or partnership and the province or territory in which you register does not require a full name search. More about that below.
Just because you have a name search (Nuans report) is not a 100% guarantee the government is going to accept your name. If the Nuans search house does not perform preliminary name searches prior to ordering a full Nuans report you should look for another one. A Nuans name search report can be ordered without a preliminary name search but an experienced search house will do a preliminary name search first so you have less chance of your name being rejected by the province or territory in which you wish to register your business without charging you extra.
Look at it this way. A person wants to register a business called Morgan Cement Services Incorporated. The search company tells the person that there is no exact match because they do not have a policy of pre-checking names. There is actually a company registered called Morgan Cement Services Ltd. This person decides to register his business called Morgan Cement Services Incorporated and the owner of Morgan Cement Services Ltd. sees his flyers in the neighbourhood. Mr. Morgan of Morgan Cement Services Ltd. has had his business for many years and has built up a great reputation. Mr. Morgans reputation and longevity in the business gives him the ability to go court and request the court to get this person to change the name of his corporation. If you consider it, it would not be in your best interest either to have a name that is similar to another registered name.
The search house will provide the Nuans name search report or similar name search report to you by email and you should take some time to review the report to ensure for yourself that the name you wish to use is not too similar to another name already registered.
In Ontario you can register any company name as long as it is different in some way. Using the example above, both those names are the same except for one space and the ending of the name. The Ontario government would let that go through however the federal government would reject it for sure because the federal government scrutinizes names more closely.
In Ontario and Alberta and possibly in other Canadian jurisdictions, you can register a business name, sole proprietorship or partnership without providing a Nuans name search report. This means the government will not be reviewing the name prior to registration and therefore the onus is on you to ensure you have a name different from others. In fact in Alberta and Ontario you can register a business name exactly the same as another business name.
In these cases it is a good idea to do a preliminary name search which you would need to pay for. Therefore in a case where you do not have to provide a name search report to register a business name, partnership or sole proprietorship, you should do a preliminary name search. Keep in mind that many search houses will do the preliminary name search for free if you chose their service to register your business name, however, if you have any concerns about that just write them and ask them what the policy is before you purchase.
Resources for Canadian Business Owners provides information about legal and government services for Canadian businesses as well as further information about a Government Name Search.
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