What is the difference between a “numbered” company and a named one?

What is the difference between a “numbered” company and a named one?

Sometimes we refer to a limited liability corporation created under the Business Corporation Act of Alberta (“ABCA”) as a “company”.  This is incorrect terminology as there is additional legislation in Alberta called the Companies Act which specifically deals with those entities created by that statute.

For the most part you will have decided with your legal and accounting advisors that incorporating makes sense for your business and financial situation and you are now determining next steps.  You should know that Corporate Registry will assign the next consecutive number to you which, in every way provides the same protection, rights, and obligations of a corporation which has a name, with the seven-digit number, eg. 2123456 Alberta Ltd., being that new entity’s name.

Generally speaking, a registerable corporate name in Alberta (eg. Blue Heron Consulting Limited) will have 3 components: 

1. the Distinctive component in the example above “Blue Heron”,

2. the Descriptive component, “Consulting”, and

3. the last word of the corporation’s name pursuant to s. 10(1) of the ABCA must be one of “Limited”, “Incorporated”, “Corporation” or their abbreviations “Ltd.”, “Inc.” or “Corp.” (or “Limitee”, “Incorporee” (accent on first “e”), or their abbreviations).

When choosing a name, you will utilize free and paid for searches (NUANS: Newly Updated Automated Name Search) that will provide information on similar names in your geographic area as well as in your industry.  It is important to obtain legal advice to ensure that you do not to choose a name that is confusingly similar to another name already in use or could be considered an infringement on a trade mark.   If you do register a name used by another corporation (you were second in time), you may be required by the Registrar of Corporations to change your name, causing you expenses of time and money making that change to your invoicing, cheques, signage and marketing materials.  

As more and more corporations are in use in Canada, it becomes more difficult to choose a unique name.   I tell my clients to consider in the distinctive component, a special travel destination or location, or a word that is made of letters from your family members’ names as an option.   The description is just that, the type of business such as “Oilfield Consulting” and the end of the name usually depends on what sounds the best without adding too many syllables.   

As you begin your business endeavours, Duncan Craig LLP is here to help you.  Whether understanding the differences of a numbered company and a named one, choosing a name, or the many questions that will follow for a corporation’s set up such as share structure and governance, our legal advisors in our Business Solutions Group will start you on the road to success – it starts here!

Author: Mae Chow