Operating name (trade name)

Customers know a business by the name on the sign, which may not be the name of the company or person behind it. A buyer who is told the price includes the name should know what that name actually is in law. What the purchase agreement says about the name is worth asking about early; see what happens to a business name on a sale.

What the name is, and is not

Alberta’s registry says a business name does not have a legal existence in its own right, so a sole proprietor or the partners remain personally responsible for the business’s debts and obligations. It also says registering a business name does not grant any right of ownership of the name. In Ontario, the Business Names Act bars a corporation from carrying on business or identifying itself to the public under a name other than its corporate name unless the name is registered by that corporation. These are each province’s own rules, so check the registry where the business operates.

Confusion with other names

Corporations Canada says, as a general rule, a corporate name cannot cause confusion with an existing corporate name, business name or trademark. Alberta’s registry also warns that if a business name is the same as, or similar to, an existing business name, corporation name or trademark, the owners could take the business to court.

• Who is registered as the owner of the name today
• Whether the agreement transfers the name, or only the right to use it
• Whether any trademark covers it