A corporation name is the name selected by a company at the time of incorporation and is listed on the Articles of Incorporation. This is the corporations legal name; however, a corporation may have one or more assumed names that it operates by. An assumed name must be registered with the province(s) in which the corporation uses the assumed name. Despite any assumed names, a corporation must include their legal name on all legal documents. A corporation can only change its legal name by filing Articles of Amendment which typically require the support of two-thirds of the corporation’s shareholders. Think of the corporation name as an individual’s birth name – it is easy to go by a different name, but there are some hoops that must be jumped through to change your birth name.
A corporation name should not be too similar to an existing corporation name, trade name, or trademark and must not be identical to another corporation name, trade name, or trademark. Prior to incorporation a NUANS search must be obtained, which identifies identical or similar names. While you may be able to incorporate a name that is similar to another’s, if the businesses operate in the same industry, you may be exposed to liability for “passing off”. Additionally, the name must not be obscene, suggest governmental control or affiliation, or be misleading.
A corporation name should have three elements: DISTINCTIVE + DESCRIPTIVE + LEGAL ENDING
1. Distinctive Element
The distinctive element differentiates a company from others operating in the same line of business. A strong distinctive element includes either a family name, a geographic name, a coined word, or an acronym.
As you can see from the table above, all of these companies are in the business of general contracting, hence the descriptive element “contracting”, but it is the distinctive element that differentiates these corporations from one another. Words that merely describe that quality of goods or services are generally not considered distinctive (i.e. Superior Contracting Inc.).
2. Descriptive Element
As noted, the descriptive element describes the nature of the business activity. The descriptive element allows for the uses of the same or similar distinctive element in more than one industry. For example, if Soltan Contracting Inc. were to expand into manufacturing they may incorporate a new company as “Soltan Manufacturing Inc.”, allowing them to continue to build the “Soltan” brand. The descriptive element should accurately describe the business activity, so descriptive words like “holdings”, “enterprises”, and “group” should only be used for holding companies. Some corporations choose not to have a descriptive element,
3. Legal Ending
Every corporation must have a legal ending such as: inc., incorporated, corporation, limited, ltd. This signifies to the world that the entity is in fact a corporation and carries the rights and responsibilities that are associated with corporate entities. Which legal ending is used is an arbitrary decision which you can select based on personal preference. Adding a different legal ending to an existing name is not permitted.
If you can’t choose a name, you can opt for a “numbered” corporation. A numbered corporation is the same as a named corporation, but its name is an auto-generated assigned number. A numbered Canada corporation, for example, may be assigned 123456 Canada Inc. If you opt for a numbered corporation, you can always register a unique operating name in the province(s) in which the corporation operates. As noted, it is also possible to change a numbered corporation to a named corporation, but Articles of Amendment must be filed to do so.
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