Hey guys! Today's post is going to introduce two things you absolutely need to know before selecting a corporate name.
I am a lawyer and have been doing this for more than ten years. I have had the privilege of working with various corporate actors, and that definitely includes incorporators and founders.
Last year, when we first got locked down, I was of course a bit shocked. As time goes on, I started thinking about how I can give something back to our community. One idea was to create this blog as a source of credible, reliable information. In particular, I hope that this first set of blog posts is helpful for guys (and girls) who may be first-time entrepreneurs.
We have been working to churn out these posts for a few months and I am glad that some people are finding the blog useful. A few posts have talked about corporate names. So, I wanted to just introduce a couple basic but important points today.
If you are looking at naming a corporation and are feeling a bit lost, well then you have come to the right place
Its all good, man. Let's do this.
What You Really Need to Know about Corporate Names
Incorporation is a powerful legal structure. It has both legal advantages -- think limited liability -- and potential business advantages, such as the opportunity to build an enduring brand. We have written a whole post about the leading theories for why a corporation is granted a separate identity as a legal person.
The bottom line is that a corporation is a separate person and it therefore has to have its own specific name. As a first-time entrepreneur, you might have questions about this, you might be wondering whether there are things you have to do or have to avoid in selecting a name. We are going to get into that here.
Specifically, in this first post on the topic I am going to keep things simple. That means we will be passing along the two things that you absolutely have to understand about corporate names.
- A corporation can be either named or numbered
- A corporate name has three essential elements.
Point 1: Numbered or Named
The federal and provincial governments share jurisdiction over business corporations. To make a long story short, the result is that an entrepreneur in Toronto gets two choices. You may choose
- to incorporate federally under the Canada Business Corporations Act (CBCA); or
- to incorporate provincially under by the Ontario Business Corporations Act (OBCA).
We have compared the key considerations elsewhere, but in either case the corporation must identify itself via either a number or a name.
You may have heard the term numbered company, this simply refers to a corporation that has decided to not use a corporate name. If you incorporate a numbered company, the registry will assign a number followed by the appropriate legal designation.
If you choose to incorporate as a numbered company, and later want to use a corporate name, that is definitely possible.
The only alternative to a numbered company is a named company. Furthermore, if you choose to incorporate a named company, the corporate name must be distinct have three essential elements. This brings us to point 2.
Point 2: A Corporate Name has Three Essential Elements
A named company has a corporate name that has been chosen by the incorporator, for example Yellowbird Consulting Corp.
When choosing a corporate name you need to satisfy the requirement for three specific elements
- a distinctive part, e.g., 'Yellowbird'
- a descriptive part, e.g., 'Consulting' and
- a corporate suffix, e.g., 'Corp.'
Let's just briefly, explain the above. Yellowbird is the distinctive element that promotes the corporation's brand. Consulting is the descriptive element describing the nature of the business. And, Corp. is the corporate suffix.
Looking for More Details?
Today's post was aimed at sharing the most important points about a frequently asked question.
I'm going to be putting together a more detailed post and will post a link here.
Also, if you are looking for more details about the whole process of incorporating, we have put together a Guide that you can use. It's free and is coming soon. Keep an eye open for that 😉
That is all, Folks
Thanks for reading today's post. I hope it helped you feel more confident about the basics of choosing a corporate name.