Ontario vs Canada

If you’re looking at incorporating a business, you will have to decide whether to incorporate that business in Ontario or in Canada. But Ontario is a part of Canada, how does that make any sense?

It does make sense because corporations that are incorporated in Ontario fall under the Ontario Business Corporations Act. You can read the whole Act here if you would like.

Incorporating as an Ontario corporation means that you can do business within the province. This is typically chosen if you don’t expect your corporation to grow beyond the province or you’re only planning on doing business within the province. Your corporation’s name will be protected from registration by another business in Ontario.

Incorporating federally in Canada means that your corporation would fall under the Canada Business Corporations Act. You can read the whole Act here if you would like.

Incorporating as a Canadian corporation allows your corporation to do business across Canada and internationally. You must file ‘extra provincial’ registrations for any province that you will be conducting business in (for an additional fee). You will also have to pay an annual fee if you incorporate federally. Your corporation’s name will be protected from registration by another business across Canada.

The differences between incorporating in Ontario or Canada will have an impact on your business. If you are thinking of incorporating, either as an Ontario corporation or as a Canadian corporation, you should consult a lawyer. A lawyer will be able to take you through the whole process and ensure the execution of all the proper documents, whether you wish to incorporate in Ontario or Canada.

No Laughing Matter

In August 2003, Canadian high school student Mike Rowe registered the domain name MikeRoweSoft.com. He thought that since his name was Mike Rowe it would be funny to add the word ‘soft’ to the end of it. It was not so funny when Microsoft brought trademark proceedings against him.

Last week I wrote about the additional name protection that a business has upon incorporation. Incorporated businesses can take this name protection one step further by trademarking their name. Trademarking a name allows you the right to initiate trademark proceedings against another person or business to prevent others from using the same business name as yours. This applies not only to business names, but also domain names.

Microsoft initiated trademark proceedings against Mike Rowe, claiming that the domain name infringed on their trademarked name. This was because the name MikeRoweSoft was phonetically similar to Microsoft. Microsoft demanded that Mike Rowe give up the domain name and offered to pay his out-of-pocket expenses, being the $10 he spent to register the domain name. Rowe countered with an offer of $10,000. Eventually both parties reached an out of court settlement. Under this settlement, Mike Rowe stopped using the domain name MikeRoweSoft.com. In exchange, Microsoft provided access to several of their paid courses and websites and sent Mike Rowe an Xbox.

While it might seem harsh that Microsoft went after a high school student, they had to protect their trademarked name. Trademark does provide a business with extra name protection, but only if it is exercised. Microsoft did so in this case to protect its name and reputation.

What’s in a Name?

If you are thinking about incorporating a business, one of the advantages is the ability to reserve your chosen business name. When you incorporate your business in Ontario, your business name is reserved for use in the province. When you incorporate your business federally, your business name is reserved for use throughout Canada. Sole proprietorships and partnerships do not have this protection, and anyone can start a business with the same or a similar name to your business if you are not incorporated.

Incorporating your business can also offer you additional name protection through a NUANS name search. This search lists similar corporate names and trademarks across Canada to ensure that the searched business name is not currently reserved by another corporation or is not confusingly similar to another corporation’s name. A NUANS report also reserves the proposed corporate name for 90 days, ensuring that no other corporation or trademark can register under a similar name in that time frame. More information on the NUANS report can be found here.