Most businesses want to know how they can protect their brand value by preventing other businesses from using a name that is the same as or similar to the name under which they do business. This is definitively one of the most frequently asked questions I get when advising business start-ups.
Business Name Registrations
A sole proprietorship, partnership or corporation can register its business name with the BC Corporate Registry. For corporations, this is done where the corporation is operating a business under a name that is different from its corporate name – often called a “doing business as” or “operating as” name. These registrations provide notice that a sole proprietorship, partnership or corporation, as the case may be, is doing business under the registered name but in BC these registrations seldom provide the degree of name protection that people expect.
Having a business name registered in BC could prevent a similar or same business name from being registered in BC. However, when it comes to incorporating with a similar name in BC the business name register is not considered when the Corporate Registry reviews a corporate name application for approval. This means that a corporate name that is similar to a registered business name could still be approved.
Unlike BC incorporations, when a corporate name is submitted for a federal (Canada) incorporation the NUANs report that is reviewed by Industry Canada will list any similar business names that have been registered (including in BC – if any) so it is possible that a business name registration in BC could possibly prevent a similar name being used for a federal incorporation. For federal incorporations other factors will also be considered, such as type of business and where a business operates, when a corporate name choice is submitted for approval. As a general test, the question is usually whether a proposed name is likely to cause confusion with an existing name that is already registered.
My usual advice to businesses is to register their business names. The banks will often require it and even if they don’t, the benefits usually outweigh the cost, which is only $85 (approx.).
A BC company at the moment of its incorporation has its name listed on the Corporate Register maintained by the Registrar of Companies for BC. Having a corporation’s name listed on the Register could prevent other BC companies from using a similar or same name. Being incorporated in BC could also prevent a similar or same name being used for a federal (Canada) incorporation. Some businesses decide to incorporate to get this perceived name protection, which is not available by simply registering a business name. Being on BC’s Corporate Register will also prevent non-BC corporations (other than the federal corporations) from registering their corporate names as part of becoming extra-provincially registered to do business in BC.
Whether to incorporate now or later is sometimes a difficult question for start-ups. Name protection is only one of many factors that should be considered. My usual advice is to incorporate if there’s more than one person who will be taking an ownership position unless there is a tax reason for choosing a partnership structure. For one owner businesses usually the main considerations are tax and liability based but name protection can also be high on the list for some. In a subsequent Article we’ll also look at trade-mark registrations which should also be considered if name protection is important to your business.
In another Article we’ll look at the benefits of registering a trade-mark and the additional name protection that a registration can provide, which can be significant. Stay tuned!