Adding a Trade Name (DBA) vs. Amending your Corporation Name

Corporations often start a business with one particular activity in mind but as things evolve and change, they want to be able to do business under a different name. Sometimes corporations want to change their legal name while others want to simply do business under a different name without incorporating a new business.

There are a couple options you can evaluate for these type of situations: trade name registration or “a doing business as” (also known as a “DBA”) filing, which will allow your corporation to use a different name, or a name amendment, which would legally change the name of your corporation.

Businesses are allowed to use names other than their legal names to conduct business. There are many terms for doing this, including DBA, which stands for doing business as, fictitious business name, assumed business name, or trade name. If a business uses another name, it must comply with provincial specific name requirements. Check out this video on business names for more info.

Trade name requirements can vary by jurisdiction. Typically, a filing must be made at the provincial level to register the name your business plans to use, and a filing fee paid. All provinces have their own name requirements for trade names. We recommend that you check with your provincial companies office for such requirements.

Once you have registered your trade name, your corporation can begin using that name in addition to its legal name. You may need to advise your bank of this new trade name if you intend on receiving checks under this new trade name. Typically, a copy of the registration will be sufficient. This allows you to have separation within your business, without the formation of a subsidiary. However, if you are considering establishing a subsidiary for other reasons, it is best to seek the advice of a lawyer or accountant.

Another option would be to change the legal name of your corporation. One thing you should consider when doing this is the business purpose on record with the jurisdiction for your corporation. If your articles of incorporation limit the activities of your corporation, amending your name may cause the corporation to extend past its current business purpose. If the business purpose listed in your articles of incorporation is a general clause, such as “all lawful business,” or “no restrictions” then changing your name would still be covered by your business purpose. Where this is an issue, amendments to the business purpose can be done simultaneously to the business name amendment. All incorporations effected through CorporationCentre.ca have no such limitations.

To effect a corporate name amendment to the Articles of Incorporation, the proposed amendment must be authorized by a resolution adopted by the board of directors. The resolution must then be ratified by the shareholders present at a special general meeting, in such percentage as required by the applicable law, at which time the shareholders also authorize one director to sign the Articles of Amendment. Typically, an amendment to the Articles of Incorporation must be confirmed by a greater majority (2/3 or 3/4 depending on the jurisdiction) of the votes cast by the shareholders at a special general meeting.

Moreover, a Name Search Report (for jurisdictions that accept only accept a NUANS report, it must be less than 90 days old) or an actual pre-approval (for jurisdictions like B.C., Manitoba, and Nova Scotia not older than 60 days).

Once this is done, the Articles of Amendment are filed with the relevant jurisdiction office, together with the prescribed government fee and name search report.

The government fees related to filing articles of amendment are as follows:

Jurisdiction Fee

Federal $200
Alberta $150
British Columbia $225
Manitoba $135
NFLD & Labrador $100
New Brunswick $110
Nova Scotia $150
Ontario $150
P.E.I. $260
Quebec $140
Saskatchewan $120

Following the processing of the Articles of Amendment by the government office, A Certificate of Amendment is issued confirming the change of the legal name of the corporation. The change of corporate name becomes effective from the date appearing on the Certificate, does not affect the corporation's rights or obligations.

Starting a Business - Business Registration or Incorporation?

One of the first decisions an entrepreneur or small business owner needs to make when incorporating is what form the business should have. There are generally three options in Canada, namely, sole proprietorship, partnership or corporation.

On our website there is good summary of each kind of Canadian business organization for review. I have also drafted a brief white paper on this topic. Also, I wrote an article about the selection of a business legal form for franchises.

You can also review our videos on YouTube on business registrations (sole proprietorships) and incorporations.

At the end of the day, while most businesses will select incorporation, this may or may not be the best way to start depending on your specific circumstances. As always, a competent lawyer and or tax specialist should be consulted.

Boomers as Entrepreneurs and Temps: Helping the Economy

As many of those in the baby boomer generation contemplate retirement, the workplace will definitely be impacted, but how? Many of them see they have less money saved than expected, be it in a 401K type of account or pension and see the need to return to or continue working.

Even as recruiters suffer due to fewer temporary workers being sought out, recruiting companies like Robert Half International (whose sales fell by 30% at the beginning of 2009) are going after the baby boomers. They are very skilled and ready to work once corporations go back to more hiring. This trend appeared in BusinessWeek as reported by Ali McConnon in their June 30 issue. A greater workforce of experienced individuals can turn around the recruiting industry, since their track record is proven and they need less training. The corporations are willing to pay more for them also.

As temps, the boomers are a worthwhile market for the recruiters since they are more likely to continue as part-timers as opposed to younger workers who just temp until they can find something full-time. As such recruiting companies are seeking out boomers through organizations like the AARP and CARP.

Entrepreneurial Start-ups

Like we have discussed in previous posts, small business looks like it has the potential to succeed in many ways despite the current recession. According to Tony Wanless of the National Post, many North American boomers are aspiring to start businesses as opposed to pursuing leisure activities in their retirements. On the whole they are healthy and have a strong drive to succeed in life. The Ewing Marion Kauffman Foundation that studies entrepreneurship, even sees the 80 million boomers leading the way out of recession.

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Corporation Minute Books - Do I need one when Incorporating?

As a lawyer dealing with small business owners that are starting-up a business on a shoe string budget - Do I really need to have a corporate minute book?

The answer is simple: yes - it is required by law; and no it does not have to be a binder.

Most Canadian laws do not specifically mention a “minute book” but rather of keeping records of specific kinds of information. Most jurisdictions in Canada require corporations, and therefore its directors, to keep records containing the articles and by-laws and any amendments, minutes of meetings and resolutions of shareholders and directors, copies of all notices of change of directors, and securities registers.

Accordingly, it is legally required to maintain these records and information in one place. These records are kept in a “Minute Book” which has the properly named sections and tabs of the records required to keep. Moreover, the maintenance and keeping up to date of the minute book ensures easy access to the desired information especially if there have been many changes over the years. As you grow your business more documents will be inserted in same.

Green Light for Organics Part III

The Price and Profit Factors: Status Matters

Even with a lack of real evidence of its superiority, people do pay more for organic produce, mainly because they believe it to be healthier as well as tastier than its counterpart. Depending on various factors, the prices can be on par with conventional produce and go up to 30% higher.

Because of the regulation/certification, lower production volumes and the fact that fewer organic products are mass produced, the price of organic can be higher. But the increase in demand recently for these products has caused greater production, thus driving down the price. Retailer Shaskin says that organic strawberries, for example go for almost the same price as the conventional ones, and that even though some organics will stay higher, many types of organic products will go down in price in the future.

Ontario-based organic wine producer Martin Malivoire believes the prices will even out and conventional food producers will find their market to be less profitable as the costs for pesticides and other conventional growth methods go up. "It will become a healthier world out of necessity because we won't be able to expend the energy and organic foods will actually be the cheaper choice," he said.

Malivoire's critically acclaimed wines are seeing an increase in sales in Ontario so his company is expanding production as well as distribution to Quebec and Alberta, among other new markets. He feels that the labeling claims no small part in his success. Though his grapes were always organic, he got the official accreditation in 2004 as he saw it made a difference to his consumers. And now he sees that his products are believed to be of higher quality for that reason.

Though he has been advised to raise prices due to his organic status he chooses not to at this point. “I think the impact is those that are not organic are going to have to reduce their prices in order to compete with us," Malivoire says.

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Ontario or Canadian Incorporation - Where to incorporate?

We often get this question - I am based in Ontario and want to incorporate my business but don’t know if I should incorporate a Federal or Ontario corporation – where should I incorporate?

Deciding where to incorporate involves many factors including evaluating corporate and tax laws. A competent lawyer/accountant should be consulted to evaluate your specific circumstances. However, for most small corporations the following factors make Federal (Canada) corporations more attractive - read below. You can also check out this video about incorporations for more information.

Federal corporations have lower government incorporation fees than Ontario corporations ($200 versus $360). Also, although Federal corporations must register extra-provincially with the Ontario government, there is no government fee for this registration.

Federal corporations have the most stringent criteria in granting the right to use a corporate name. Ontario corporations (like most other provinces) offer very little protection of use, and will grant almost any name provided it is not identical. Moreover, if there is any protection, it is limited to that province, unlike federal corporations which afford Canada wide protection.

Federal corporations require that 25% of its directors be resident Canadians, while Ontario corporations require 51% be resident Canadians. This may be advantageous if you have foreigners involved in your business.

Delays for both are approximately the same where Certificates of Incorporation can generally be obtained within 2 working days or less.

However, Federal corporations must file annual reports at a cost of $20 per year whereas Ontario corporations’ annual reports are free.

You can check out our pre-incorporation checklist for Ontario incorporations. For a more detailed answer check out this link about where to incorporate in Canada.

Green Light for Organics Part II

Questionable Standards Until Now for Canada

Despite that proper accreditation for organic products has existed in Europe and the U.S. for several years; until recently Canadian organic products could receive such a title even based on the manufacturer using organic hand soap. There has only been voluntary certification here until June 30 of this year; when the labeling standards for Canadian organic products became enforceable by law.

According to Michael Saumur of the Canada Organic Office at the Canadian Food Inspection Agency, those companies claiming to be organic on their labels that don't act on a warning to comply with the laws are subject to their products being removed from stores or face prosecution. These laws include a requirement for a product to contain at least 70% organic ingredients to be called “organic”. There will also be a specific logo for products that are over 95% organic. Those products that are between 70% and 95% organic can state their percentage on the packaging.

Though the laws may be inconvenient to implement at first, Denise Shaskin of Planet Organic Market believes they will ultimately benefit the organic industry. Now the competition in the industry can be more fair too, and the new certification is recognized by the U.S., eliminating the need for separate certification in order to export goods. According to a study in the Canada Gazette, the new certification standards could have a net benefit of $752 million for the economy.

In Shaskin's experience, people's main reason to shop for organic goods is due to an illness in their family. So since they often scrutinize the contents of a product for health concerns, she believes the certification standards will boost many consumers' confidence in the contents of the packages they buy.

Shaskin, recognizing the increasing demand for organic products in the marketplace, entered this market in 1993 and started the Planet Organic chain in 2001. She claims that annual sales jumped to $113 million last year from only $2 million for her retail chain that operates throughout Canada now and intends to expand further into Ontario and Alberta.

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Green Light for Organics Part I

Topping the Pizza

Matthew Von Teichman's wife was expecting, and in a move to introduce a more healthy lifestyle she decided to buy an organic pizza for their supper. They were both largely unimpressed. But this spurred Mr. Teichman, the experienced entrepreneur, onto a new venture to offer people a good range of more than palatable organic food products. Life Choices Natural Foods, which now has expanded across Canada and the U.S., was born.

Now sporting nine product lines that are certified organic, featuring breaded chicken, mac and cheese and the newest one, multigrain perogies; their first product offer was indeed pizza.

Von Teichman notes the organic industry's explosive sales growth rate of 20% recently, compared to that of most non-organic products that only goes up by 1 or 2% per year. This can be attributed to consumers' greater awareness of health-related issues as well as improved access to research on organic science via the internet. Von Teichman sees the interest as being due to people's demand for nutritious foods and their demanding to avoid dangerous substances like chemical residues. The main selling points of organic products, including food, health-care products and vitamins are that they are generally not genetically modified and they don't contain antibiotics, herbicides, hormones, insecticides or pesticides.

Is Organic Truly Better?

Apparently, there is no definitive proof of organic food being more nutritious or healthier than its non-organic counterpart. According to Professor Rena Mendelson of Ryerson University who is also chair of the Canadian Council on Food and Nutrition, a variety of farming conditions makes it difficult to pinpoint the nutritional levels or their sources. But she feels that there is a difference in terms of the impact each type of food has on the environment. A reduction in pesticides would make all farming more organic and put those foods ahead of nonorganic produce in that regard.


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Canadian economy not to be outdone – Part II

At the G8 summit, both the U.S. President and British Prime Minister, among others called for additional economic stimuli on a global scale, despite the US$2 trillion already expended as they feel it has yet to push demand high enough. On the contrary, Canadian PM Stephen Harper urged other leaders to focus on ensuring proper delivery of those stimuli already promised. "That's been our focus in Canada and I would encourage the same priority elsewhere," he told the press.

Canada's stimulus package consists of $46 billion over 2 years, poised for creating more jobs and igniting consumer demand. The amount is expected to increase to almost $80 billion once the provincial and territorial aspects kick in. PM Harper claims 80% of the planned federal funds have already been committed. In addition, Bank of Canada cut its key lending rate from 4.5% in December 2007 to its present level of .25%

Analysts see the present Canadian stimulus package taking effect in the next few months and see no need for any new stimulus monies. There is always a lag from the announcement of the stimulus package until effects are seen from it, must like that of lowering interest rates, according to Craig Wright, chief economist at Royal Bank of Canada. "Staying the course is probably the prudent path right now," he says.

Stefane Marion, chief economist at National Bank Financial, agrees that we must wait for the money to start working in the economy. Canada's financial system in general is in better shape than those of most other G8 countries and did not have the same real estate collapse that they did. He also sees production rising this year as indicated by purchasing managers and other key factors.

Furthermore, the IMF advises countries to continue to support their economies in some way until the recovery takes hold (predicted next year); while they should also plan to reduce deficits in their budgets caused by spending to combat the recession.
Canada, along with the IMF in general also agreed to make emergency capital available for borrowing, for countries that may need it soon.

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Canadian economy not to be outdone – Part I

The International Monetary Fund, which released a report at the same time as the G8 summit convened, believes Canada is capable of the most improvement in her economy for 2009 and 2010 compared to almost all industrialized nations. Though some leaders at last week's G8 summit are pushing for more stimulus money, other economic experts don't think they will be necessary in Canada.

Despite expectations of a slight shrinking for the world's economy this year (1.4%), IMF has a positive outlook for the end of the recession in 2010, calling for 2.5% global economic growth next year, up more than .5% from their predictions last April.

Other industrialized countries' economies are expected to decrease by 3.8% this year, in comparison to Canada, only expected to drop by 2.3%. Only .8% growth is predicted for the US for 2010, half that of Canada's forecasted gain of 1.6%, which is only second in line to Japan's 1.7%. India and China, top consumers of Canadian raw materials are seen as leading in growth for 2010, set to increase by 6.5% and 8.5%.

Even though they feel that emergence from the recession will be on the slow side, "Financial conditions have improved more than expected, owing mainly to public intervention, and recent data suggest that the rate of decline in economic activity is moderating," the IMF commented.

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