Choosing a corporate name can be a difficult task

Choosing a corporate name is probably the most difficult task of incorporating a business. Every corporation must have an acceptable name at the time of their incorporation because the corporation will then exercise its rights and carry out its obligations under this name. All corporate names must conform to various statutory requirements. You may wish to review the relevant acts and regulations of your jurisdiction.

The most common concern when trying to select a corporate name is that corporate name cannot be identical to or lead to confusion with another corporation or business already using an identical or similar name.

A corporate name is generally made up of 3 parts:

1. Distinctive element;
2. descriptive element; and
3. a legal ending.

The distinctive element of the name is the part that makes distinctive from other corporations, i.e. what makes them different. The more different or fanciful the name the better.

The descriptive element describes the main activities or type of business of the corporations.

The legal ending indicates that it is in fact a legal corporation and not just a business registration or partnership. You can choose from the following words: Incorporated, Limited and Corporation, or their respective abbreviations: Inc., Ltd. and Corp.

All corporations MUST have a distinctive element and a legal ending to their names. Some corporations choose not to have a descriptive element.

For example, in the name "Tiger Computers Inc." the word "Tiger" is the distinctive element; the word "Computers" is the descriptive element; and the "Inc." is the legal ending.

Below are other examples of corporations' names:

To increase the chances of your proposed name being accepted or not be in conflict with another business or corporate name or trademark, it is recommended that you choose a name that both accurately describes your business and is as specific and distinct as possible. If your proposed corporate name uses common or popular names, the chances of it being accepted are decreased dramatically. Furthermore, you may be prohibited from using a corporate name, which is either identical or deceptively similar to one that is already used by another corporation or competitor in your jurisdiction.

Restrictions on corporate business names

Your corporate name cannot be identical to or lead to confusion with another corporation or business already using an identical or similar name. The criteria typically used to determine if there is confusion include:

• distinctive character of each name and each of their elements
• visual and phonetic similarity
• similarity in the ideas they evoke
• manner in which the names are used
• notoriety of each name
• actual or potential competition between the corporations
• nature and quantity of goods and services offered
• territory and number of persons served by both corporations.

Also, there are certain words that are typically prohibited for business corporations. These include:

• Obscene word or wording
• Co-op, co-operative or any variation
• RCMP
• Parliament Hill
• United Nations
• Red Cross
• Housing
• Association
• Any wording that might be confusing with a government institution
• Engineering, Engineers
• College, University, Institute.

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Author: Lionel J. Perez, President, CorporationCentre.ca
Lionel J. Perez is co-founder and currently oversees operations of CorporationCentre.ca - Canada's leading corporation website for small businesses, entrepreneurs and professionals. As an attorney, Lionel practiced corporate, commercial and technology law with a technology law firm servicing start-ups and publicly traded corporations. Lionel holds law degrees from Osgoode Hall Law School and the Université de Montréal and is a member of the Quebec Bar Association.

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