Guidelines for Naming a Federal Corporation
From LawDepot Law Library
Contents |
Important Note
LawDepot provides this article based on information available as of July 2, 2008. The information contained within this article should not be construed as legal advice. If you require detailed information and/or advice about corporate law, trademark law, tax law or any other subject area considered in this article, please consult with an attorney in your area. LawDepot accepts no liability for errors and omissions contained within this FAQ.
General
In order for a corporate name to be accepted at a federal level, it must:
- be distinctive,
- not cause confusion with another business,
- not be obscene,
- not be misleading, and
- not contain prohibited terms or prohibited connotations.
The primary reason that corporate names are rejected is because they are too similar to existing registered corporate names, trade names, or trademarks. If you wish to register a named corporation, your LawDepot Incorporation Package will come with a NUANS search, which will help to determine if your name is identical or similar to an existing name.
That said, names that pass a NUANS search can still be rejected for various other reasons. The following article details elements of federal corporate names that are acceptable, as well as those that are unacceptable.
Distinctive Name
All corporate names must contain a distinctive word or term that can be used to differentiate that corporation from all other corporations.
Distinctive Element
A name lacks distinctiveness when it is only descriptive of the products or services offered by the corporation. For example, “Motors Inc.” and “Windows Ltd.” lack distinctiveness. Both of these names would require the addition of distinctive elements, such as “North Toronto Motors Inc.” or “Johnson Windows Ltd.”
Words or terms that merely describe the quality of goods and services are generally not considered distinctive elements. For example, “Fast Motors Inc.” and “Mechanical Motors Inc.” would probably not be accepted. However, exceptions may be made when:
- Alliteration creates an acceptable level of distinctiveness, as in “Magnificent Mechanical Motors”
- The descriptive term is one that is not usually used to describe the goods or services offered by the company. For example, “Good Motors Inc.” is not distinctive, because any number of motors may be described as good. “Furious Motors Inc.” may be sufficiently distinctive, because motors are rarely described as “furious”
Geographic Names
Geographic names may be used in corporate names, but only with the addition of a distinctive element. For example, “Toronto Grocery Inc.” would most likely be acceptable, because it has a level of distinctiveness.
However, geographic names are not distinctive on their own. For example, “Toronto Inc.” is unacceptable, because “Toronto” is not distinctive.
Names of People
Names of people may be included in corporate names, but only with the addition of a distinctive element. For example, “John Smith Painting Inc.” would likely be accepted, because the combination of the terms “John Smith” and “Painting” creates a level of distinctiveness.
However, names of people are not distinct on their own. “John Smith Inc.” is not distinct.
Please keep in mind that you need to obtain the permission of the person whose name you are using. Naming your corporation “Jean Chretien Woodworking Inc.” might be good for business, but it is unacceptable if you do not have his permission.
Avoiding Confusion
A name will be rejected if it is likely to cause confusion with other corporate names, trademarks, service marks, or trade names. LawDepot will conduct a NUANS search for you before filing your Articles of Incorporation. However, if you adhere to the following guidelines before submitting your proposed corporate name(s), you can avoid losing time and money due to a rejected corporate name.
Famous Names
A corporate name will be rejected if it includes a trademark, trade name, service mark or corporate name that is famous.
For example, “Coca-Cola Plumbing Inc.” will not be accepted, even though the addition of “Plumbing” makes the name somewhat unique. “Coca-Cola” is a highly famous name (and trademark), and its use in a corporate name will cause confusion. Likewise, names with terms that are so similar to “Coca-Cola” that they are likely to cause confusion will also be rejected. For example, “Coke-Cola Inc.” and “Cocacola Inc.” will be rejected.
Highly Distinctive Names
Names can be highly distinctive, even if they are not famous. A name can be rejected if it contains a highly distinctive word or term that is already being used by another company.
A chain of retail stores might have the corporate name “Gwarinlo Stores Inc.” Because “Gwarinlo” is such a distinctive word, its use in another corporate name might cause confusion. For example, if there was a “Gwarinlo X-Ray Inc.” or a “Gwarinlo Pictures Ltd.”, the general public might be confused as to whether or not the different Gwarinlo companies are affiliated, even though the companies offer very different products and services.
Diluted Words and Terms
On the opposite end of the spectrum from highly distinct names are highly diluted words and terms. A word is highly diluted if its use is so common that the word no longer holds any distinctiveness. For example, the word “General” is common and there are many corporate names that contain the word “General”. It would be difficult to argue that the word by itself holds any distinctiveness. The public is unlikely to confuse goods and services offered by “General Baking Inc.” with those offered by “General Electric” or “General Motors”.
However, a proposed corporate name might still be rejected if it is too similar to another corporate name that contains the same diluted word. For example, “General Electricity Inc.” will probably be rejected, because it is likely to cause confusion with “General Electric”.
Obscene Words and Terms
A name will be rejected if it includes words or terms (in any language) that are obscene, or if the name implies that the company is engaged in activities that are obscene.
Misleading Names
A name will be rejected if it is deceptive or if it would confuse or mislead the public as to the nature of the company.
If “Delectably Delicious Inc.” is a catering company, the name should be fine. However, if “Delectably Delicious Inc.” manufactures nothing but rat poison, the name is misleading and would therefore be rejected.
It is important to note that the name of the corporation does not necessarily have to accurately describe the nature of the company. “Instant Clarity Inc.” is a fictional example of a corporate name that does not necessarily accurately describe the nature of the corporation’s business. However, the name may be accepted if it is not inherently misleading.
Prohibited Terms
The following terms are unacceptable. A name with one of the following terms in it will always be rejected:
- “Air Canada”
- “Canada Standard” or “CS”
- “Cooperative”, “Co-op” or “Pool” (when used to connote a cooperative venture)
- “Parliament Hill”
- “Royal Canadian Mounted Police” or “RCMP”
- “United Nations” or “UN”
Note: Certain French variations of the above terms are also unacceptable.
The following words and terms are unacceptable for use in Federal corporate names, unless you have prior written consent from the appropriate regulators.
- “Alberta” or “Alta”
- “B.C.”, “British Columbia”, or “of British Columbia”
- “Manitoba”
- “New Brunswick”
- “Newfoundland” or “Nfld”
- “Nova Scotia”
- “Saskatchewan”, “Sask”, or any other word or term that implies affiliation with the Government of Saskatchewan
Prohibited Connotations
In addition to the previous terms, which are strictly prohibited, there are words and terms that are prohibited only if they have specific connotations or implications.
Government Affiliation
A word or term is prohibited if it implies an association with or the approval of federal or provincial governments and/or their agencies and departments. For example, “Province of Ontario Chemicals Inc.” and “Government of Canada Ice Cream Ltd.” would almost certainly be rejected.
A name will also be rejected if it includes the word “Canada” preceded by a word or term that is within the scope of activities in which a person might believe the federal government is involved in. For example, “Firearms Control Canada Inc.” and “Hockey Development Canada Inc.” would probably be rejected, as a person might confuse these for departments or agencies of the Government of Canada.
However, a name like “Fun House Mirror Canada Inc” might be accepted, as it is unlikely that anyone would believe that the Government of Canada is in any way affiliated with fun house mirrors.
Crown Affiliation
A name will be rejected if it implies Crown patronage or an affiliation with or endorsement by the Royal Family. For example, “Royal Family Funeral Services Ltd.” and “Queen Elizabeth II Jewelry Inc.” would almost certainly be rejected.
A name may be acceptable if it contains a term that can be, but in the context of the name is not, used to imply an affiliation with the Crown or Royal Family. For example, the name “Prince Albert Funeral Services Ltd.” might be accepted if the corporation was based out of or offered services in the city of Prince Albert, as the name would not connote Crown patronage or an affiliation with the Royal Family.
Financial Activity
If your corporation will provide services of a financial nature, your name should not imply that the corporation is a bank or offers the services of a bank, loan company, trust company, insurance company, or stock exchange, unless you have the consent in writing of the appropriate federal or provincial regulator(s).
Universities and Professional Associations
If your corporation is in a professional or educational field, your name should not imply affiliation with an existing professional association or university if no such affiliation exists.
Other Resources
- For information about the differences between provincial and federal incorporation, view Provincial vs. Federal Incorporation
