Follow 5 basic guidelines to naming incorporated company
One business matter that is often overlooked or not properly reasoned is choosing an appropriate name for your business.
Many people just happen upon a name and do not put the forethought and planning into the name of their business. The reason why this is so important is that the company name will form the basis upon which the business and its products or services will be recognized, thereby building up what can amount to a considerable amount of goodwill and value to the business.
The first consideration is whether to simply register a business name under the umbrella of a sole proprietorship. Aside from the unlimited liability of this business structure that we have discussed previously, this type of business name registration provides minimal name protection and if you are planning on developing brand awareness through your business name, you are taking the risk that someone can come along and incorporate or trademark your name and you will be forced to compromise.
There are some simple guidelines when choosing a name for your incorporated company:
- The name is suitable for the company and the market in which you are working.
- It is relatively short in length and memorable.
- It is distinctive enough to differentiate your company from your competitor.
- From a federal perspective, names that can be interpreted as confusing, containing certain terms (i.e., Royal) and require personal consents may not be allowable. And ...
- The name must not infringe upon any existing corporate name or trademark. In order to ascertain if there are existing businesses or trademarks registered in Canada, you will need to obtain a N.U.A.N.S. search which clearly sets out the registered businesses.
Talk to your marketer and lawyer — the last thing you’ll want later is a letter from another owner name that conflicts with yours.
Jeffrey D. Cowan, B.A., B.Comm, LL.B., M.B.A., is the Principal of Cowan & Taylor, Barristers & Solicitors which practises in the areas of business and real estate law. Cowan appears in Your Money every other week. E-mail firstname.lastname@example.org call 416-363-5046 with questions for future columns. The information contained in this article should not be relied upon as legal advice.