Not-for-profit organizations that are incorporated under either provincial or federal legislation must register a business name if they operate under a name that is different than their legal name.
The Business Names Act (Ontario)
Businesses are often familiar with this requirement, but not all not-for-profit boards understand that, as a corporation, they too are subject the Business Names Act (Ontario).
The Business Names Act applies to all corporations operating in Ontario, wherever or however incorporated, and prohibits a corporation from identifying itself to the public by any name other than its registered legal name, unless that name is registered by the corporation with the Ministry of Government and Consumer Services (MGCS).
Unlike a corporate name, a business name registration is no guarantee of exclusivity or ownership. A business name registration, unlike a trademark registration, does not protect the name from other people or organizations. The Ministry maintains a database of all registered names and the corporations (or individuals) that registered them, and organizations should conduct a search of possible names prior to registration to ensure that no other organization or business is using that name or a name that might be confusingly similar.
Registering a Business Name in Ontario
Registering a business name is a fairly quick and easy process. It can be done online directly through Service Ontario ($60) or through a third-party service provider. Once a corporation has successfully registered a business name (sometimes called trade name), it is provided with a Master Business Licence, which is the evidence of registration.
A Master Business Licence is valid for five years from the date of registration and must be renewed prior to expiry if the corporation wishes to continue to use its business name. No notice of expiry is provided by the government, so the onus is on the organization and its directors or staff to diarize the expiry date and take the appropriate action.
Restrictions on Business Names
Certain business names will not be accepted by the Ministry. For example, the registered business name cannot include the words "incorporated or limited" or their abbreviations, make any suggestion that the organization is associated with the government, or assert that it is a post-secondary educational institution, unless it has specific consent. There also are certain restrictions on what words may be used to describe the business activity of the organization. Registrations that do not comply with the Ministry's standards will be rejected or sent back for amendment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
