How to Create a GREAT Business Name
- Create a Remarkable, Marketable Name
- Distinctive & Descriptive Elements
- Get Set for the Net
- Business Names
- Corporation Names
- Corporation Numbers
- Trade Styles
Choosing a great name for your new business is one of the most important, but intricate, parts of business start-up. When creating a name for your business, you need to consider the legal, operational and marketing aspects, as well as aesthetics, and even your own personal style. You must also understand your business’ potential for growth, your competitive environment and the image you want to project to your customers or clients.
In this age of company as brand and with the importance of customer relationship management, your business name will become a valuable asset whose equity can be measured in financial terms. As a result, it is important to choose your name wisely and to protect your legal right to use it.
1. Create a Name that is Remarkable and Marketable
The best business names are both Remarkable and Marketable. This means that they are both unique and can be easily remembered and recognized. A name which is not unique could lead to the creation of confusion in the market between businesses which use the same or a similar name. A name which is not memorable or easily recognizable will not serve to create ongoing awareness of your specific product or service.
All business names should be created with the following points in mind:
- Does the name convey the nature of the product or service you offer?
- Does it set your business apart from the competition?
- Is it easy for people to remember? Spell? Pronounce?
- Does it appeal to the market segment you hope to attract?trademark conflicts first. Given the global nature of the Inteet, it is recommended that you perform a Canadian and US trademark search even if your business currently only operates in Canada.
- Does the name reflect the image you want people to associate with your company?
- Is it a name that can grow with your business as you add new products or services, or expand into other provinces?
- Is the name as short and memorable as it can be without being misleading or non-descript?
- Can the name be registered as a domain name for use on the Inteet? If not, can you create an appropriate domain name that is easily associated with it?
Click here to meet Robert Stone and see how he answers the questions above to create a remarkable and marketable name for his business.
2. Distinctive and Descriptive Elements
All business names should include both a distinctive and a descriptive element. These elements serve to enhance the uniqueness of business names and they reduce the likelihood of conflict when searching and registering your business name.
The distinctive element uniquely identifies the company or business owner through the use of a distinctive word or set of words; the descriptive part describes the type of business activity.
To be considered distinctive, your business name:
- Should ideally contain a coined, or made-up, word or set of words which is unique to your business and is created by you
- Must not be confusing with existing business names or trademarks
- Cannot mislead or confuse the public as to the nature of the business (for instance, you may not misrepresent its product or service offering or pass your company off as something it is not, such as a school, bank, etc.)
- Cannot contain words of an obscene or socially objectionable nature
- Must include a legal element or identifier (in the case of corporation names only)
You should be aware that there are varying degrees of distinctiveness. Personal names and acronyms are considered to be among the least distinctive; made-up or “coined” words are the most distinctive.
ABC Technical Services (least distinctive) versus Zoltex Compu-Technical Services (more distinctive)
IMPORTANT! Once you have come up with one or more prospective names for your business, make sure that you can legally use at least one of them by performing a name search. If you use a name that already exists or is confusingly similar to an established trademark or business/corporate name, you could face legal action for infringement, or be liable for the other company’s loss of business. As a result, even if a search is not required, you should always search prospective names before they are registered. You can conduct a search of your proposed names at:
3. Get Set for the Net NOW
It is strongly recommended that you search and/or register your domain name at the same time as your business name, even if your business is not yet ready for the Inteet. If you wait to register the domain, it may not be available when you decide to move forward online, or you may have to purchase the domain name from someone else. You can find out whether or not your chosen domain name is available by completing a free WHOIS domain search at Domain Search.
- Tip #1: The “.com” extension is used extensively and its availability is limited. If your preferred domain name is taken, you could try another extension such as “.ca” or “.net” as long as it makes sense for your business and where it operates. Be aware, however, that liability for confusion can arise even if one of the domains is taken. In this situation it is advisable to choose another name in order to avoid confusing your customers and risking potential legal action.
- Tip #2: You should purchase as many domain extensions as possible for a given name. It is a cost-effective way of protecting the name for your own use, even if you do not develop a website now.
- Tip #3: If you plan to register a domain name for your business, you should search for possible trademark conflicts first. Given the global nature of the Inteet, it is recommended that you perform a Canadian and US trademark search even if your business currently only operates in Canada.
Business Names, Corporation Names and Numbers, Trademarks and Trade Styles
Different degrees of legal protection are accorded to different types of business names based on their structure (i.e., sole proprietorship, partnership or corporation). In addition, each Canadian jurisdiction (both provincial and federal govements) has its own laws which apply to both corporate and business names.
4. Business Names
In all Canadian jurisdictions, other than the Province of Newfoundland & Labrador, all business names must be registered. The only exception is for sole proprietorships which operate using the exact personal name of the sole proprietor. For example, the business name “Susan Johnson” does not need to be registered, but “Susan Johnson Consulting” must be.
If your business is a sole proprietorship, general or limited partnership, registration of the business name will entitle you to use that name for advertising, signage and legal purposes. In most Provinces it does not, however, prevent others from using your name for their business.
For instance, in most cases, if you registered your gift shop under the business name “Linda’s Little Treasures”, another person could register and use the same name.
Only by incorporating your business or by registering your business name as a trademark can you ensure the exclusive use of its name in a given jurisdiction, and avoid the issue of potential liability and confusion arising from the same name being used by two or more companies operating in the same line of business and the same geographical area.
5. Corporation Names
If your business is a corporation, it will need a “corporate” name or number. As previously discussed, corporation names should include “descriptive and distinctive elements” and must include a “corporate identifier”.
Any of the following words or their contractions may be used as a corporate identifier; however, once a given identifier has been registered as part of your corporation name, it must always be used exactly as it appears in your Articles of Incorporation.
For example, if your business has been incorporated as “NovaTech Software Solutions, Limited”, it must never appear in any other form, including “Ltd.” instead of “Limited”.
English Corporate Identifiers: Limited, Ltd., Incorporated, Inc., Corporation, Corp. French Corporate Identifiers: Limitée, Ltée, Incorporée, Inc., Corporation, Corp.
Please note that corporate names enjoy legal protection and exclusivity within their jurisdiction of incorporation; i.e., provincial or federal. Federal corporation names are reserved across Canada, while provincial corporate names are only reserved in the Province of incorporation. As a result, federal names have a stronger degree of protection which is second only to that offered by trademarks.
While corporate names provide their owners with a greater degree of legal protection than business names, trademarked names (whether owned by corporations or not) provide the greatest legal protection of all.
6. Corporation Numbers
Incorporated businesses may choose to use a numbered name (i.e., 123456 Ontario Inc.), instead of a standard name. There are advantages and disadvantages to this option depending on the type of business you operate.
If your company deals with the public, it is strongly recommended that it uses a corporation name. It is much easier to market your corporation using a name which is memorable and unique. Numbered names are not easily remembered and do not create any brand awareness.
If your business does not deal with the public, but rather exists as a holding or investment company, these marketing considerations are usually irrelevant. Using a numbered name spares you the time and effort involved in creating a name and having it searched, and/or the expense of possibly having it registered as a trademark. The govement will assign your corporation number in your jurisdiction of incorporation (i.e., provincial or federal).
A corporation number is entitled to the same rights of exclusivity and degree of legal protection as conferred upon a corporation name. A numbered company must include its jurisdiction of incorporation along with a corporate identifier or legal element in its “numbered name”. For example: 123456 Ontario Ltd. or 654321 Canada Inc.
A numbered company is also allowed to register alteate trade names provincially.
For more detailed information on different types of business structures and how to select the one that is right for you, please click here.
7. What is a Trademark and Why is it Important?
Any business, whether it is incorporated or not, may decide to trademark its business name, product brand(s), logo, or even its advertising slogan. Registered Trademarks are identified as being the exclusive property of their owner. No person or business is legally entitled to use a trademark without the written permission of its owner, or without a licensing agreement.
Trademark protection is federal – your trademarks are entitled to protection across Canada regardless of the jurisdiction of your business; however, this protection does not automatically extend to countries outside Canada. You must register your trademarks in each country where legal protection or exclusive rights are sought.
The superscript TM (MC in French) which follows a name or graphic indicates that trademark registration is being sought for that entity; the superscript ® (MD in French) indicates that the trademark has been officially, legally registered to its owner. Registered trademarks are granted the highest level of legal protection and exclusivity. They can become a tremendous business asset with considerable equity. (Some trademarks become so well known, that they become part of everyday language and sometimes a brand name will replace the generic name.).
To register a trademark, an application must be made and a fee paid, to the Canadian Trademarks Office, in Ottawa.
8. Trade Names…or Alteate Names for a Corporation
Corporations are permitted to register names other than their primary corporate name which they wish to use to identify themselves to the public. These alteate names, commonly known as trade names, are essentially the same as unincorporated business names; however, they are simply owned by a corporation rather than by an individual.
Suppose the owner of a corporation called “TechNet Inteet Solutions, Inc.” wants to differentiate his business to appeal to different market segments. He can “subdivide” his corporate name into different business areas, each with its own trade name. This allows him to market and advertise his individual businesses using separate names, but maintain one set of books, payroll, etc. and file one tax retu under the umbrella of his corporation name.
To clarify the relationship between trade names and their parent corporation name, terms such as “operating as”, “doing business as” or “a division of” are used interchangeably. For example, the above business owner could say “TechNet Inteet Solutions, Inc.”, doing business as “TechNet Web Design Services” or “TechNet E-biz Applications”, a division of TechNet Inteet Solutions, Inc.
Trade names can only be registered provincially. In terms of legal protection and exclusivity, this type of registration is exactly the same as a sole proprietorship/partnership registration. The only difference is that the owner of the trade name is a corporation, not an individual person.
9. Registerability versus Liability
As outlined above, there are three different levels of legal protection for business names and marks.
- Trademark protection provides the highest level of protection to a business name or mark. You can trademark a brand name, your business name or logo or even a tagline or slogan. The superscript TM is often used when trademark rights are claimed as a result of a pending trademark application. After a trademark has been registered, the registered trademark symbol (shown as a superscript ®) is used. This indicates that the highest degree of legal protection has been achieved for the business name or mark.
- Corporate name protection is conferred by the govement through the incorporation process itself. This requires a name search and prohibits multiple registrations of the same name within its particular jurisdiction. Please note that legal protection varies by jurisdiction, with federal incorporation providing the greatest degree of protection.
Common law (passing off) protection gives rise to legal liability for all businesses if they use a name that is identical to, or similar enough to create confusion among one or more businesses operating in the same geographical area and conducting similar types of business.
Some Provinces do not require that a name search be completed before registering an unincorporated business name. As these Provinces permit the registration of multiple identical unincorporated business names, you cannot assume that the name you register will be afforded legal protection in the event that confusion is created between your name and another similar name operating in the same geographical area and/or in the same line of business. If the first registrant of the name can prove that business was lost as a result of your name’s entry into his area, you, as the second registrant, may be held liable. This applies to both incorporated and unincorporated business names.
For more information on creating business names and other related topics, please click on the appropriate links below.
- 10 Steps to Creating a Corporation
- 8 Steps to Establishing a Sole Proprietorship or Partnership
- What is a Name Search and When Do I Need One?
- How to Select the Best Structure for Your Business
- Selecting a Jurisdiction of Incorporation
- Options for Foreign Corporations Wishing to Do Business in Canada
Create a remarkable, marketable name for your business.
Search it. Register it. Protect it.
The information presented in the document above is provided for reference purposes only. It is not intended to be a
substitute for the appropriate legal advice of a competent, professional lawyer. The above text contains names of people
and companies for illustrative purposes only. Any resemblance to living people or actual companies is purely coincidental.
NUANS® and CIDREQMD are registered trademarks/sont des marques déposées of the Govement of Canada/du
Gouveement du Québec respectively.