Thursday, February 7, 2013

How to Choose a Corporate Name

There are many elements that go into choosing a business name.  Most business owners want a name that not only describes their business but has good marketing potential and stands out from the crowd.  But, more importantly, names have to meet the legal requirements set by the jurisdiction of incorporation.  This is where things can get difficult!   You can choose a name that sounds really cool and fits perfectly with your business, but the government may think otherwise.

To avoid the disappointment of a name rejection, here are some tips on choosing a name that fits with your business AND the legal requirements.

Create a distinctive element.

This is what sets your business apart from others.  Whether it be a coined or original word, geographic location or family name it is important to be original and creative when coming up with this element to avoid infringing upon another company name.

Add a descriptive element.

This part tells the customer the type of business the company does.  For instance, if you’re a tech company you may want to use something like ‘Software’ or ‘Telecommunications’.

Choose your legal ending.

This is the easy part.  Legal endings come in various forms but all incorporated companies must have one attached to their name.  The legal names used in Canada are Inc., Ltd., Corp., Incorporated, Limited, Corporation.

      Make your name memorable.

      An easy to spell name with positive connotations goes a long way in marketing your business.  Keep in mind how this name might look as a logo, on a website, in signage and used in other marketing collateral.  

The criteria used if there is confusion with another company is the distinctive character of each name, the visual or phonetic similarity, the ideas evoked, the manner in which the names are used, notoriety of the name, potential competition between the companies, the nature of services provided, and the territory served by the company.

To avoid paying for numerous name reports, doing a pre-search of corporate names can help you get an idea of what names are already in use.  To avoid disappointment, come up with at least 3 variations of your name, all of which you are happy with, so that if your first choice is rejected you have other options that can meet the requirements.