Choosing a business name can be challenging. There are many ways to go about picking a business name. Read on for suggestions about this crucial step, and what to do once you've decided on an identity for your business.
How to create a business name?
The CRA suggests three fundamental steps before settling on a business name: choose a good one, find out if the name is available, and register the name as soon as possible. Here are some CRA criteria for a fitting name:
It reflects the product or service on offer
It's in line with how you want to be perceived
The name is unique and distinctive enough to avoid legal issues.
Can two entities have the same business name?
In general, you can't use a name already taken. Canadian business law prohibits using a business name that is very similar to, or the same as, an existing corporate name or registered trademark. Even if the law allows it, it isn't recommended, given the likelihood of confusion.
So how do I know if a name is available for my business?
Begin with an internet search. Check social media to see whether the alias that would go along with it is in use. Be sure to look internationally, especially if you plan on doing business outside of Canada. There are two databases you can search. For territories and provinces other than Quebec, Nuans will provide a report of all similar corporate names and trademarks, good for 90 days. Quebec residents and those interested in doing business in la belle province should check out this database provided by Revenu Quebec. Quebec business names must be in French, but this can be as simple as adding a French article or conjunction. To be safe, you might also want to check these regional databases: Alberta: Corporate Registry Searches British Columbia: Name Requests Online Manitoba: Companies Office Saskatchewan: Find Information on an Existing Business New Brunswick: Corporate Registry Search Newfoundland and Labrador: Commercial Registration (request a name search by phoning the registry office at 709-729-3317.) Northwest Territories: Corporate Registry Searches Nunavut: NNI Business Search Prince Edward Island: Corporate/Business Names Registry
How to secure and protect a business name?
Once you have decided on a business name, you need to register it with the government. Before you can do that, you're required to determine what form your business will take. The four types of business structures in Canada are:
A sole proprietorship means that you are the only owner, and you take full responsibility for all debts and obligations related to your business. In case of outstanding debt, a creditor might claim your personal assets as well as business assets. Here are some of the CRA's pros and cons for this category: Pros
Easy and inexpensive to start and register
Full control over operations
You get all the profits.
Cons
Unlimited liability means your personal assets are at risk in case of debt
You have to do all the work.
Partnership
This type of business structure is a non-incorporated business created between two or more people. Partners manage the company and assume responsibility for the company's debts and other obligations. Typically, a legal document is required. There are different kinds of partnerships. A general partnership means both or all partners are liable for business debts. A limited partnership means that a person can participate in the business without being involved in its operations. A limited liability partnership is usually a group of regulated professionals, such as accountants, lawyers, or doctors, who work side-by-side but not necessarily together. Pros
Relatively simple to start once you reach a legal agreement
Shared work and profits
Tax breaks if profits are low.
Cons
Unlimited liability as with a sole proprietorship
A good partner is hard to find
Partners may disagree on the management of the business.
Corporation
Forming a corporation is done at the federal and provincial levels. The choice is not strictly an either-or situation; if you incorporate federally, you'll still have to incorporate provincially as well. Unlike a partnership or a sole proprietorship, a corporation is a separate legal entity from its shareholders. You would not be personally liable for any debts your incorporated business incurred. Pros
Limited liability
Separate legal entity
Has the advantage of raising capital over other business structures.
Cons
Lots of regulation
More documentation required at the outset and in general
Once you know your business name and what business structure you intend to use, most businesses have to register their names. Sole proprietors who use their names, however, are not required to record them. You can also register a trademark. Corporate business structures have their names registered when they register as corporations. If you incorporate at the federal level, you get exclusive rights to your name throughout the country. If you register at the provincial or territorial level, you have exclusive rights to your name in the province or territory where you registered.
Trade name
If you decide to operate under a name other than your legal business name, you would have to register it as a trade name. Even a small modification to your existing name, or operating under a slightly different version of your legal business name, carry a legal obligation to register a trade name. If you omit to do so, you might face fines or other legal consequences. Registration of trade names takes place at the provincial or territorial level. Check with your local government for more information: Alberta: Register a Business Name British Columbia: Name Approval Process Manitoba: Companies Office Name Reservation New Brunswick: Register/Renewal of a Business Name Northwest Territories: Business Names and Partnerships Nova Scotia: Reserving a Business Name Nunavut: Business Registration Ontario: Register a business name or a limited partnership Prince Edward Island: Business Name Registration Quebec: Register an Enterprise Saskatchewan: Reserve a Name Yukon: Register a Business Name A business name that fits might be hard to come by at first. If you're having trouble, check out online resources such as business name generators. You could ask friends and family for advice, or a trusted mentor. Pay attention to the things you like, or imagine what the best part about running your business will be. Remember to make sure the name you want to use is available. Be sure to fulfill any legal obligations such as registering your business name, trademark or trade name. Good luck and have fun!
