Everyone involved in the transportation sector has dealt with numbered companies. These entities, whose corporate names are made up of a string of numbers followed by their jurisdiction, are hard to distinguish between each other.

And, if public facing, they lack the appeal of a recognizable brand. An easy fix for Ontario corporations is to choose a catchy name to operate under, registering it with the Ontario government.

A company’s “corporate name” and its registered name are two different things. A corporate name is the corporation’s actual name in its articles of incorporation, similar to a person’s name on their birth certificate.

Meanwhile, a registered name is another name under which, once registered, the corporation is allowed to identify itself as without having changed its corporate name.

But what happens when an Ontario company decides to operate under a name other than their corporate name without registering it? In Ontario, the Business Names Act, R.S.O. 1990, c. B.17 makes it so that no Ontario corporation can identify itself to the public under a name other than their corporate name unless that name is registered.

Penalties

This act imposes significant penalties on corporations identifying themselves under an unregistered name.

A corporation that is carrying on business while identifying itself to the public under an unregistered name is not able to sue other parties in connection with that business except with court approval. Obtaining court approval is difficult and requires proving that the failure to register was inadvertent, the public was not deceived, and any registration shortcomings have since been fixed.

The act also makes it an offense for a corporation to identify itself to the public under an unregistered name and, on conviction, that corporation may be liable for a fine of up to $25,000.

How to register a name

If an owner of a corporation personally uses his or her corporation’s unregistered name, a court may find the owner, and not the corporation, was using the unregistered name as an alias, potentially making that owner unable to benefit from their corporation’s limited liability status.

The solution to avoid this is easy. A corporation may register a name by paying a prescribed fee of $60 and either registering the proposed name online at www.ontario.ca/businessregistry or by completing and filing Ontario form Register a Business Name for a Corporation – Business Names Act.

The registration is effective for five years from the date it is accepted and can be renewed by paying another fee of $60.

Prior to registering a name, registrants should verify whether it has already been registered or is deceptively similar to an existing corporate or registered name.

The act entitles the registrant of an existing name to obtain compensation via lawsuit for any damage they suffered due to the registration of the same – or deceptively similar – name, up to a maximum amount of $500. In such a lawsuit, the act also requires the court to order that the second name’s registration be canceled.

Considering the modest registration fee and significant downside of operating under an unregistered name, corporations should avoid taking any chances and ensure the name they use to represent themselves to the public is properly registered.