Can I buy a business name from someone in Canada?

The question of how to buy a business name treats it as if it were a piece of equipment. Alberta’s government says registering a business name does not grant any right of ownership of the name. What the federal Trademarks Act makes transferable is a trademark in the name, if the seller has one, with or without the goodwill of the business. So the useful question is whether the name is protected as a trademark and who holds that right today.

What a name registration does and does not give

In Ontario, the Business Names Act says an individual shall not carry on business or identify the business to the public under a name other than their own unless the name is registered by that individual, and it sets similar rules, with exceptions, for corporations and partnerships. Alberta’s government states plainly that registering a business name does not grant any right of ownership of the name. Rules in other provinces may differ, so check the register where the business operates. A buyer who will carry on the business under the name has its own registration to deal with, as covered in how to register a business name after an asset purchase.

Where ownership can actually sit: a trademark

Under section 48(1) of the Trademarks Act, a trademark, whether registered or unregistered, is transferable, and deemed always to have been transferable, either in connection with or separately from the goodwill of the business, and in respect of all or some of the goods or services it has been used with. The Canadian Intellectual Property Office says you can sell, bequeath or transfer your rights to someone else through an assignment. If the name is a trademark, the purchase agreement is where that assignment is dealt with, alongside the rest of an asset sale.

What to check before paying for a name

Alberta’s government warns that choosing a name the same as, or similar to, an existing business name, corporation name or trademark could lead the owners to take you to court. Ask a lawyer whether that risk applies to a name you are buying. Ask the seller to show what rights it holds in the name. Search the trademarks register and the relevant provincial name registers for similar names. Ask whether the seller uses the name under someone else’s licence, and if so, what, if anything, it can assign. If the name is only registered and is not a trademark, ask a lawyer what the seller can actually hand over. Changing the name after closing is a separate step, described under business name change.