Of all the arcane legal trivia I have picked up over the years of study and practice, one thing that I have never come across, is the reason for the various legal endings that exist for business corporations; there are nine:
Wherever they came from, here they are now. Nine separate terms that denote that your business is registered under the Business Corporations Act. Except for the English and French distinction, there is nothing about any of them that carries any distinguishing feature. When I ask clients what legal ending their new corporation will have, they often respond that they don’t care. When I ask clients what legal ending their current corporation has, they often respond that they can’t remember.
That is the extent to which the legal ending doesn’t matter. In every other instance it is incredibly important.
Once chosen, the legal ending is as important as every other part of the name. Mistake an “Ltd.” for a “Limited” and you might as well be talking about another company (except we’re talking about trade-mark matters, which right now we aren’t). These mistakes can be bothersome, time-consuming and costly.
In recent weeks I’ve seen these errors account for thousands of dollars of unnecessary legal fees and dozens of hours wasted on everything from fixing errors in titles to property to multiple PPSA searches to ensure security registration against the right company.
It is vitally important that you get your name right every time. It is perhaps more important to get the names of the corporations that you do business with right every time as well. Entering into a contract with the wrong name on a document will result in considerable expense if it ever becomes an issue for litigation. Searches must be done, investigations must be undertaken, and ultimately a judge will have to be convinced of what should have happened and between whom.
Getting the name wrong will make it impossible to properly secure any debt that you might be taking for a transaction. It will almost certainly make collections, even on a debt, difficult if not impossible. In short it will create a monstrous headache after the fact that could easily have been avoided with a small bit of due diligence.
Before doing business, make sure that you know that you are entering your corporation’s full legal name in the appropriate places. Remember that using a registered business name alone is not enough – the Business Names Act requires that the Corporate name be used, in addition to any name that business is carried on under, in all contracts, invoices or negotiable instruments.
But also make sure that you know that your customers, your suppliers and any other corporations that you do business with are properly identified as well. If you have any doubts, speak to us and we will provide the searches and profile reports necessary to confirm the valid status and proper name of the parties you do business with.
Getting it right the first time is invaluable.