Thursday, October 15, 2009

Are you incorporating? Read this for Valuable Advice.

By Holly Crosgrey

In 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 search is a pre-check of a proposed company name, business name or sole proprietorship name before you order your full Nuans name search report or other similar name search. Having a preliminary name search done prior to ordering a full search can save money in the long run.

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.

When you order a Nuans Name Search or name search report with a search house normally the search house will do a preliminary name search as part of the service. You should ask this in advance or confirm this on the website of the search house. You should not have to pay for both a preliminary and a full name search separately. The only time a preliminary name search should be paid for separately is if you are registering a business name, proprietorship or partnership and the province or territory in which you register does not require a full name search. More about that below.

Just because you have a name search (Nuans report) is not a 100% guarantee the government is going to accept your name. If the Nuans search house does not perform preliminary name searches prior to ordering a full Nuans report you should look for another one. A Nuans name search report can be ordered without a preliminary name search but an experienced search house will do a preliminary name search first so you have less chance of your name being rejected by the province or territory in which you wish to register your business without charging you extra.

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.

Upon receipt of a Nuans report or similar name search report you must take some time to look over the report to ensure for yourself before in register a business that there are no names that are too similar to the one you proposed to use.

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.

To register a business name, partnership name or sole proprietorship name in the provinces of Alberta or Ontario, and maybe in some of the other provinces and territories as well, you will not need a name search (Nuans report) to register. The governments in Alberta and Ontario do not check names prior to registering business names. The person registering the name must ensure themselves that the name is not already taken since they could still be taken to court if they pick a name that conflicts with another. As well, the Ontario government and the Alberta government will allow you to register a business name which is exactly the same as another business name already registered.

In a situation such as this you would want to purchase a preliminary name search. To conclude, in a case where you are registering a partnership, business name or sole proprietorship and a name search is not necessary you should purchase a preliminary name search. As a matter of fact, a lot of searches houses will check your name for free prior to registering a business name or a sole proprietorship or a partnership. If you are unclear about the website you are dealing with contact them. I am sure they would be glad to advise what their policy is. - 16890

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