Are You Incorporating? Read This For Valuable Advice.
June 17th, 2010In Canada the governments in all of the provinces and territories require some form of name search report prior to incorporating a company and in many Canadian jurisdictions before you register a business name, partnership or sole proprietorship.
A preliminary name check is done by someone who wants to register a sole proprietorship, corporation, partnership or business name prior to ordering a Nuans name search or similar report. Performing a preliminary name search prior to ordering a full name search helps to let you know if there is a chance the name is clear. It can save you money having this done.
The full name search is reviewed by the government to determine if there are any names which can be consider a conflict. It does this before it allows you to register your business. The federal government in particular will not accept a proposed name that sounds similar to a company name already registered.
If you place an order with a search house for a Nuans name search report or similar report a preliminary name search is normally done as part of that fee. Determine in advance before ordering your name search that the preliminary name search is part of the service. A full Nuans name search must not be provided without first having a preliminary name search performed. There is was exception to this rule. If you are registering a partnership, sole proprietorship or business name and the province or territory does not require a name search then in that case you should pay separately for a preliminary name search to be done before you register your business name. I will go into this further below.
There is no guarantee that a name is going to be accepted by a government just because you have a name search report for that proposed name. If a preliminary name search is not part of the service of the search house when you order a Nuans name search or similar search report then you should look for another search house. A Nuans search house has the ability to order a Nuans report without a pre-check of the name but a fully trained search house would never do so without a preliminary check of the name just to try and rule out any advance conflicts.
Consider it this way. You decide you want to register the name John’s House Cleaning Business Inc. There is no exact match but there is a registration for John’s Housecleaning Business Ltd. The search house you use does not tell you about John’s Housecleaning Business Ltd. because they do not pre-clear the name. You register your business and John of John’s Housecleaning Business Ltd. finds out about you. He has established himself in the same area where you live and is well known to the public for 20 or more years. He considers your business name as a conflict and he could take you to court and try to force you to change your company name because it is a conflict to him. Depending on how well he is established or the conflicts that arise after you start using your name, you could be requested by court order to change your business name. Can you imagine how much trouble that could be for you? Would you want to have a name that was that close to another business anyway? It would be a conflict for you as well.
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 obtaining a Preliminary Name Search.
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