Wednesday, April 23, 2014

Named vs. Numbered Corporations

Choosing a name for your business can be a tough task. Not only do you need to come up with something distinctive and original that describes your company, you also have to make sure that the name isn’t similar to any other named corporation out there. Each jurisdiction has its own set of requirements for names and this can lead to a frustrating process.  Sometimes your first choice just doesn’t cut it and you have to go back to the drawing board.

 Numbered corporations allow you avoid delays and expense involved in searching for and reserving a corporate name. So if you need to incorporate quickly, this is a good option. You would be required to use your incorporated number for any legal matters or relations (i.e. contracts, government filings), but you are able to register a trade name and be known to your customers as operating under such trade name. Or, you can always file Articles of Amendment at a later time to change from a numbered to a named corporation.

If you’re set on having a named corporation, make sure you have at least 3 possible options for your name.  Don’t put all your eggs in one basket or the outcome may be very disappointing! Having variations of your name submitted allows for a better chance that at least one will be approved and you’ll avoid the back and forth paperwork, time and expense of re-submitting names. Stay tuned for our blog post on how to choose a corporate name, for tips on best practices when coming up with a name that suits your business AND the legal requirements.

There are positives and negatives to choosing between a named and numbered corporation and it is dependent upon the objectives of the business and its shareholders. For the best outcome, weigh your options carefully and create a plan of attack before you begin.

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