No one doubts that a business name has real value. It is an asset which is bargained in the purchase of a business, and in many cases the business name is the most substantial asset being transferred. Accordingly, it comes a surprise to most people how unregulated the use of a busines name really is in the province of British Columbia.
Unlike many jurisdictions, there is no statute in British Columbia which directly governs the use of a business name. Essentially, subject only to the bounds of good taste and public decency, a person is free to adopt and use any business name they choose. By adopting and using a business name in the marketplace an individual begins to acquire property rights in the name.
Most significantly, a person who has established rights to a name through public usage can obtain the assistance of the British Columbia courts to prevent others from using the name. Lawyers refer to such proceedings as “passing off actions”, since the legal basis of the claim is that the wrongdoer is impersonating, or passing themselves off, as an existing business, and it is necessary to prove that existing customers of the complaining business are being confused, in order to succeed.
For example, a business which had used the name “Joe’s Garage” for its Surrey-based repair shop, could likely obtain an injunction to prevent an interloper who moved in next door from calling itself “Joe Garage”, but would be unlikely to succeed against an identical rival who operated in Prince George.
But wait, you say – none of this could apply to your business, because you paid the fees to register your name in Victoria!
Confusion abounds about the role of the Ministry of Finance and Corporate Relations in regulating the use of business names. This ministry maintains two interlocking registries, one for incorporated enties (the Company Registry), and the other for unincorporated entities (the trade name registry). It is possible to search both of these registries to determine if a particular name, has been registered.
It is also possible, for a $30.00 fee, to request that a name be reserved for up to 56 days, while you are preparing documents for incorporation or trade name registration.
Many people seem to believe that obtaining an intial name reservation secures their right to use a particular name in perpetuity. Not so! Obtaining a name reservation simply confirms that the Companies Office has approved your proposed name as acceptable and available, and that no one else will be allowed to register the name during the reservation period. It is still necessary for you to complete the process by submitting either incorporation documents, or a trade name registration form.
A trade name registration, which costs $50, is a simple declaration that you are unincorporated (i.e. a proprietorship or partnership) and have adopted a particular business name. Again, this should not be confused with the incorporation of a limited liability company, which involves the creation of a complete legal entity with a legal, registered name. Registration of your business name gives you some security, since the Companies office will not subsequently allow the registration of an identical, or similar, name, and proof of registration is the most cogent evidence there is that you are entitled to use a name and to prevent others from stealing your customers with a copycat image.
The bad news is that the rights you aquire through registration, or the public use of a business name, are strictly private rights, which means that no-one but you can, or will, enforce them. The Ministry of Finance and Corporate Relations does not have an enforcement mechanism to prevent the unauthorized or injurious use of a business name. The courts are available to assist, but only in the context of a private law suit, funded by the affected business.