The Benefits Of Performing A Preliminary Search Before Incorporating
In Canada the governments in all of the provinces and territories require some form of name search report prior to incorporating a company and in many Canadian jurisdictions before you register a business name, partnership or sole proprietorship.
A preliminary name search is a pre-check of a proposed company name, business name or sole proprietorship name before you order your full Nuans name search report or other similar name search. Having a preliminary name search done prior to ordering a full search can save money in the long run.
The full name search is reviewed by the government to determine if there are any names which can be consider a conflict. It does this before it allows you to register your business. The federal government in particular will not accept a proposed name that sounds similar to a company name already registered.
If you place an order with a search house for a Nuans name search report or similar report a preliminary name search is normally done as part of that fee. Determine in advance before ordering your name search that the preliminary name search is part of the service. A full Nuans name search must not be provided without first having a preliminary name search performed. There is was exception to this rule. If you are registering a partnership, sole proprietorship or business name and the province or territory does not require a name search then in that case you should pay separately for a preliminary name search to be done before you register your business name. I will go into this further below.
There is no guarantee that a name is going to be accepted by a government just because you have a name search report for that proposed name. If a preliminary name search is not part of the service of the search house when you order a Nuans name search or similar search report then you should look for another search house. A Nuans search house has the ability to order a Nuans report without a pre-check of the name but a fully trained search house would never do so without a preliminary check of the name just to try and rule out any advance conflicts.
Think of it this way. Say you plan to incorporate a business with the name Johnson Lawn Services Ltd. The search house you are working with tells you there is no other name registered exactly as that. The search house does not bother to pre-check names as part of their service and there is a name already registered called Johnson Lawn Services Inc. Since the search house has told you there is no exact name you register your company. Mr. Johnson of Johnson Lawn Services Ltd. becomes aware that you have registered a company with almost the exact name except the ending. He considers this competition and since he has had his name for a number of years he decides to sue you to obtain an order to force you to change your company name. It is possible he could obtain an order such as this if he can prove your name is a conflict. This would cause you wasted time and money. Further, would you really want to have a company with a name that close to another company’s name. It would also be a problem for you.
The search house will provide the Nuans name search report or similar name search report to you by email and you should take some time to review the report to ensure for yourself that the name you wish to use is not too similar to another name already registered.
A Name search would be accepted for registering a company in Ontario even if the names are almost 100% identical. Referring back to the two names above, these names only differ because of the last word in the name. The Ontario Ministry of Government Services would accept this even though both names are very close. This would not be the case with the federal government since they are more careful with name acceptances.
To register a business name, partnership name or sole proprietorship name in the provinces of Alberta or Ontario, and maybe in some of the other provinces and territories as well, you will not need a name search (Nuans report) to register. The governments in Alberta and Ontario do not check names prior to registering business names. The person registering the name must ensure themselves that the name is not already taken since they could still be taken to court if they pick a name that conflicts with another. As well, the Ontario government and the Alberta government will allow you to register a business name which is exactly the same as another business name already registered.
In these cases it is a good idea to do a preliminary name search which you would need to pay for. Therefore in a case where you do not have to provide a name search report to register a business name, partnership or sole proprietorship, you should do a preliminary name search. Keep in mind that many search houses will do the preliminary name search for free if you chose their service to register your business name, however, if you have any concerns about that just write them and ask them what the policy is before you purchase.
Resources for Canadian Business Owners provides information about legal and government services for Canadian businesses as well as further information about obtaining a Preliminary Name Search.
