Corporate Names: Choosing a Name

Choosing a name for your company usually involves a pen, a note pad and a lot of head scratching.  You want to pick a name that people will remember – something catchy – which is easy to write or type. But what don’t you want?

Easy. You don’t want a name for your company which violates someone’s trademark. And you don’t want to pick a name which is illegal.

Trademarks and company names

We’re lucky that in Canada and the United States, there are federal databases for trademark registrations. Other jurisdictions around the world have them too, but let’s keep the focus on Canada for a moment. Trademarks are a form of intellectual property which entitle the owner of the trademark to exclude others from using their trademark for unauthorized purposes. Who decides what’s an authorized purpose? The owner of the trademark.

In Canada, CIPO is where you’ll want to run a first check of the name for your company through the trademarks database in order to see if it is actually part of someone else’s trademark.

Sometimes, a company doesn’t go as far as registering a trademark, but will use a trade name (or “nom d’emprunt” in French). Think of it as a form of unregistered trademark. This unregistered form of intellectual property also entitles the owner to some rights (although not as clear cut as the registered form). For this reason, Industry Canada requires incorporators to submit a NUANS report prior to incorporation which shows that no other CBCA corporation uses the proposed name for your company. In Québec, you’ll want to run a search on the website of the REQ to see if anything pops up as well, whether you’re incorporating under the QBCA or simple registering to do business in Québec.

One of the trickiest issues comes up when a corporation has incorporated without a specific name – meaning Industry Canada or the REQ has simply assigned a number (ex. 1234567 Canada Inc. or 1234-5678 Québec Inc.). These corporations may also have trade names which they have indicated to the REQ, but it won’t be readily apparent because of the numbered legal name. So keep an eye out for those when picking a name for your company.

Language laws and naming regulations

You also need to think about applicable language laws and naming regulations. For example, you can’t pick a corporate name which is prohibited by law, misleading or otherwise restricted by regulation. Little known fact: you can’t call your CBCA incorporated company “Parliament Hill Inc.

And you also need to make sure that if you are doing business in Québec, you have a French language version of your name – even if your name is a made up word with no obvious French language equivalent.

So before you settle on a name for your company, before you begin investing money in logo design and brand image, run the name by your lawyer. A couple of bucks spent early on can save you thousands later, and a whole lot of headaches.

Assigning Intellectual Property

So you got together with a bunch of other people and built a really cool new application which you think you can build a business around. One person had a keen eye for design and created a great user interface. Another person could write amazing code. And you were the one who came up with the idea in the first place.

All of that stuff: code, design, idea, information, content, etc… You know what that is? It’s intellectual property. And one thing’s for sure, if you’re going to start a new company and make a go of it, you need to assign the IP to the corporation once it’s incorporated. As it stands now, if you have not assigned the IP, your company doesn’t own the code, the design or the idea behind it all.

If the corporation doesn’t own the IP, then it does not own the most fundamental asset behind the business you want to build. Investors don’t invest in empty companies. They invest in companies with assets (i.e., IP) and smart teams who can build the business.

Assigning IP is not a complicated process – a simple contract between each founder and the company immediately following the time of incorporation is all that you need.

And if ever you have more IP developed by third party contractors or employees, you’ll want something similar from them to make sure that each has assigned all of the IP they’ve developed for the company, to the company.

These IP assignment agreements are frequently coupled with some confidentiality obligations, and a waiver of moral rights. They aren’t expensive to prepare (heck, some law firms (like mine) give them away for free to small companies). And for goodness sake, don’t just grab something off the internet you found somewhere and think that it will work for you. Laws vary from jurisdiction to jurisdiction, and accordingly, agreements relating to intellectual property may not work in one place even though they work just fine in another. Call you lawyer and get it done right.