Ontario incorporations for small business
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Corporate Names

Do You Even Need a Name? What About a Numbered Company?

If you’re doing business with the public, we recommend using a name, not a number, as many people are suspicious of numbered companies.

Incorporating as a numbered company is usually quicker than incorporating with a name, because you don’t have to do a name search (which can take time if you can’t get your first choice). The number you get is determined by the Ministry. The result will be something like 1234567 Ontario Inc.

If you do need/want a numbered company, for whatever reason, but you also want a name, you can incorporate under a number and then carry on business with a name that you register with the Province.

What does that mean?

Carrying on business under a name that’s not the same as your company name is basically the same idea as registering a business name as a sole proprietor (more information on sole proprietorship here). As an individual person, if you want to do business using a name other than your own, you can (have to) register that name with the Ontario government. A corporation is considered a legal “person.” As a corporate legal person, if you want to do business using a name other than your corporate name, you also can (have to) register that other name with the Ontario government.

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.
  • 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.

For example: Just Us Chickens Broadcasting Corp.
Distinctive element: Just Us Chickens
Descriptive element: Broadcasting
Legal ending: Corp.

Confusing Corporate Names

In order to avoid confusion in the marketplace 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.

In Ontario, your corporate name can’t be exactly the same as that of any known entity. If your proposed name is not identical to an existing name, the Ontario government will let you register it. However, that does not always mean you actually have the right to use the name you’ve just registered.

All it means is that the government has acknowledged the ‘birth’ of a new legal entity — your corporation — and has registered it in the list of companies doing business in Ontario.

Right to Use Your Corporate Name

The right to use your corporate name can be a whole different matter. The right to use a name for a company or for a trademark usually goes to the first person (or company) to use the name. If your name is confusingly similar to a previously existing name, you may not have the right to use it.

For the purposes of registering a business name, the Ontario government does not concern itself with whether your name is confusing, only with whether it’s identical to an existing name. But Ontario law does: according to the Business Names Act, you can’t use a name that would cause confusion with an existing name. As far as they’re concerned, it’s up to you to figure it out, and it’s up to the courts to enforce.

So what that means for you is that it’s to your advantage to make sure you’re not going to run afoul of an existing business.

NUANS Name Search

An important tool for making sure your name is going to be useable is the NUANS name search report that you have to submit with your application for a named corporation. (FYI: NUANS stands for Newly-Automated Name Search.) The NUANS report contains names that are similar to the one you’re proposing, from not only the Ontario provincial records, but also from the other provinces and territories (except Quebec), the federal government, and the federal trademark database.

The NUANS report you submit with your application has to be an “Ontario-biased” report. What that means is that the search results put Ontario companies with similar names in similar lines of business higher in the report than companies in other jurisdictions. That is why the Ontario government will not accept NUANS reports from other jurisdictions.

Incorporation Does Not Protect Your Name

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.

Using Your Name Outside Ontario

If you do business outside Ontario, you are generally required to register your corporate name in that province or territory. If your name is too similar to an existing name in that jurisdiction, your request to do business under your name may be refused.

Using Your Federal Corporation Name in Ontario

If you are a federal corporation doing business in Ontario, then you are required to register under the Business Names Act as an extra-provincial corporation.