Selection of a Corporate Name
Choosing a corporate name is probably the most difficult task of incorporating a business. Every corporation must have an acceptable name at the time of their incorporation because the corporation will then exercise its rights and carry out its obligations under this name. All corporate names must conform to various statutory requirements. You may wish to review the relevant acts and regulations of your jurisdiction.
The most common concern when trying to select a corporate name is that
corporate name cannot be identical to or lead to confusion with another
corporation or business already using an identical or similar name.
A corporate name is generally made up of 3 parts:
1. Distinctive element;
2. Descriptive element; and
3. a legal ending.
The distinctive element of the name is the part that makes distinctive from
other corporations, i.e. what makes them different. The more different or
fanciful the name the better.
The descriptive element describes the main activities or type of business of
The legal ending indicates that it is in fact a legal corporation and not just
a business registration or partnership. You can choose from the following
words: Incorporated, Limited and Corporation, or their respective
abbreviations: Inc., Ltd. and Corp.
All corporations MUST have a distinctive element and a legal ending to their
names. Some corporations choose not to have a descriptive element.
For example, in the name "Tiger Computers Inc." the word "Tiger" is the
distinctive element; the word "Computers" is the descriptive element; and
the "Inc." is the legal ending.
Below are other examples of corporations' names:
Big and Tall
To increase the chances of your proposed name being accepted or not be in
conflict with another business or corporate name or trademark, it is
recommended that you choose a name that both accurately describes your business
and is as specific and distinct as possible. If your proposed corporate name
uses common or popular names, the chances of it being accepted are decreased
dramatically. Furthermore, you may be prohibited from using a corporate name,
which is either identical or deceptively similar to one that is already used
by another corporation or competitor in your jurisdiction. Restrictions on Corporate Business Names
Your corporate name cannot be identical to or lead to confusion with another
corporation or business already using an identical or similar name. The
criteria typically used to determine if there is confusion include:
- distinctive character of each name and each of their elements
- visual and phonetic similarity
- similarity in the ideas they evoke
- manner in which the names are used
- notoriety of each name
- actual or potential competition between the corporations
- nature and quantity of goods and services offered
- territory and number of persons served by both corporations
Also, there are certain words that are typically prohibited for business
corporations. These include:
- Obscene word or wording
- Co-op, co-operative or any variation
- Parliament Hill
- United Nations
- Red Cross
- Any wording that might be confusing with a government institution
- Engineering, Engineers
- College, University, Institute