One thing that we have noticed with our corporate clients is that they are often operating under a name different than that which has been incorporated. For example, incorporating “ABC Company Incorporated” and then operating under “DEF Co”.
What’s the problem with that? Everything. The Business Names Act specifically states that “no corporation shall carry on business or identify itself to the public under a name other than its corporate name unless the name is registered by that corporation.”
The corporation that you registered is a legal entity that can enter into contracts, etc. You cannot choose to operate under a different name without doing the proper searches and registering that name with the Ministry of Government and Consumer Services. In failing do that, you could potentially be infringing on someone’s Trademark, which can be serious problem.
How do you fix this? When incorporating, you can choose to either incorporate with the name that you want to operate under, or if you choose to operate under a different name, get your corporate lawyers to take that extra step to ensure that the business name is available and register it. The corporation will own that business name. It is a legal entity, and can be used on a store front, when invoicing clients and in operations.
Same goes for individuals who wish to operate without incorporating. You still need to register a Business Name. This is called a Sole Proprietorship, or in the case of more than one individual, a Partnership. The searches are still required and you will then be able to operate with that name.
Our advice: reach out to a lawyer to assist with your corporate planning. In most cases, it will save you money as it can cost more to fix mistakes than to have it done right in the first place.
Christine Allan, Law Clerk