• General:
• Federal Articles of Incorporation:

1. General

Q: What is NUANS Report?

A: NUANS stands for "Newly Upgraded Automated Name Search". NUANS report is a five-page document that incudes a list of business names, corporate names, and trade marks that sound similar to the name you are proposing. The list drawn from the national data bank of existing and reserved business names, corporate names as well as trade marks registered and applied for in Canada.

A NUANS report must be ordered and submitted to the government corporation registration office to support your proposed corporate name when you are applying for your incorporation.

A NUANS report shall be obtained from private business known as Search House. When you order a NUANS report on your proposed corporate name from a search house, the report has a life of 90 days from the date the NUANS report was requested. This date appears in the right-hand column beside the proposed name.

For any provincial incorporation, you need order the province biased NUANS report, which will generate the report in a way of putting more weight to the province's names; for federal incorporation, you need order federal NUANS report. If you ordered a wrong type of Nuans report, Your report will not be accepted.

Q: What is corporate profile search?

A: If you need to find out the information regarding an existing business, the corporate profile search will provide you the information in the public record, such as the name of the directors/owners, business address, any change filed to the company's branch, etc.

Q: What is corporation?

A: A corporation is a business, which is a legal entity separate from the owner or owners of the business. The owners of the business are called shareholders and have no personal liability for the company's debts, unless they hav3e signed a personal guarantee. The liability of the company is limited to the assets of the company. The shareholders elect directors who re responsible for managing the business affairs of the corporation. The shareholders can be the directors as well. The profits of the corporation may be retained for reinvestment or distributed to the shareholders in the form of dividends at the discretion of the directors.

Q: Who can form a corporation?

A: One or more competent individuals who are Canadian residents, 18 years of age or older and who are not in a status of bankrupt may form a corporation under the Ontario Business Corporations Act (OBCA) or under the Canada Business Corporations Act (CBCA).

Q: Should I incorporate?

A: This depends on your particular situation. The type of legal structure (sole proprietorship, partnership, or corporation) you decide on for your business will depend upon the type of business you are in, your potential risk and liability, and the amount of money you need to start and expect to earn. If your potential risk and liability are high, the incorporation process will provide protection. If you are starting a home-based business with little or no risk, you should consider the advantages of having a sole proprietorship. It is always a good idea to consult a lawyer and tax accountant.

Q: What is Business Name registration?

A: These are the most common business name registrations.

• Sole proprietorships (one owner) carrying on business under a name other than the owner's name;
• Partnerships carrying on business under a name other than the names of the partners (this doesn¡¯t apply to limited partnerships carrying on business under the Limited Partnerships Act);
• Corporations carrying on business under a name other than their corporate name;

Q: What is Sole Proprietorship?

A: A sole proprietorship refers to an individual who owns a business in his/her personal name, or operates through a trade name. The business income and the owner's personal income are considered the same for tax purposes. Therefore, business profits are reported on the owner's personal income tax return, based on federal and provincial income tax schedules. Business expenses and losses are deductible. A proprietor is personally responsible for all debits or liabilities of the business.

Q: What is partnership?

A: A partnership is a proprietorship with two or more owners. The owners may have different percentage properly reflects their investment and contribution to the partnership. Each partner shares profits and losses in proportion to his respective percentage interest. The partnership business itself does not pay any tax. Instead, the individual partners pay tax based on their portion of the net profit or loss, and this is shown on their personal tax return. Each partner is personally liable for the full amount of the debts and liabilities of the business. You should not enter any partnership arrangement without a written agreement regarding responsibilities for financing the business, sharing the profits and losses, specific duties, and other important considerations.

Q: Do I need to hire a lawyer to incorporate?

A: No. A lawyer may provide valuable advice, but is not a requirement for incorporation.

Q: Should I incorporate Federally?

A: Many small businesses incorporating under the CBCA (Canada Business Corporation Act) have the intention (either now or sometime in the future) of operating in more than one province of territory. They choose to incorporate federally now in order to simplify their business relations later if they decide to expand operations or grow larger.

One of the reasons most often given by our clients for choosing federal incorporation is the heightened name protection provided to federal corporations, seen as an important element of the right to carry on business throughout Canada. It is a guarantee that once your corporation obtains its name, that name has a protected status second only to trademark protection.

Q: How to propose a Federal Corporate Name?

A: Your proposed corporate name must meet certain requirements before it is approved by the Corporations Directorate:

• The name must be distinctive.

  It must be easy to distinguish your proposed name form the names of other businesses that carry on the same activities. Your name will not be distinctive if it merely describes those activities. For example, ¡°Car Manufacturer Inc.¡¯ is too general and lacks distinctiveness, but ¡°East Side Manufacturer Inc.¡± is distinctive.

• The name must not cause confusion with any existing name or trademark.

  It is to your advantage to learn about possible name conflicts as soon as possible. If your name is too close to an existing corporate name or trademark, the owner of that name or trademark could launch a court action to compel you to stop using your name and perhaps even to pay damages.

  In assessing whether confusion is likely, the Corporations Directorate looks at all circumstances, including a comparison of the goods, services and operating area of your proposed business with those of existing businesses. While name approval from the Corporations Directorate does not guarantee that you are not violating the rights of another firm or individual, it significantly reduces your risks.

• The name must include a legal element.

  The accepted way to include a legal element in a corporate name is to add a term to the end of the name such as: Limited, Incorporated or Corporation, or contractions of these such as Ltd., Inc., or Corp.

• The name must not include unacceptable terms.

  Examples: "Parliament Hill", "RCMP", "Air Canada", "United Nations".

Q: What's the difference between trademarks and trade names?

A: A trademark is a word, logo, symbol or design, or a combination of one or more of these features, that is displayed for identification purposes to the public. The display can be on commercial goods or their labels or containers, in association with the advertisement of services, or for the purpose of identifying the services or goods to purchasers.

A trade name is a name under which a particular business is carried on by an individual, partnership, or company. A trade name can be registered under the Trade Marks Act as a trademark only if it is also used as a trademark.

Q: Should I register the trademark?

A: It is not mandatory to register a trademark, but it is advisable to do so in many situations. If a trademark has not been registered, the holder of the trademark has what are called common-law rights. In other words, rather than the Trade Marks Act and cases relating to the Act providing protection, the owner of the unregistered trademark must rely on the courts to determine what is fair or appropriate in the circumstances.

2. Federal Articles of Incorporation

Q: How long does it take to process my articles of incorporation?

A: Your articles are usually processed within 24 hours, but this time may vary according to request volumes and Examiner availability. Each transaction is individually assessed by a Corporations Canada Examiner, making it difficult to provide an exact processing turnaround time.

Q: I have a NUANS report. Does this mean the name I wish to incorporate has been pre-approved?

A: No. Although a NUANS is mandatory, it is not the equivalent of pre-approval. Pre-approval is a virtual guarantee that the name will be accepted, and can only be provided by Industry Canada.