In Ontario, when incorporating a business, one of the decisions that needs to be made is whether to register a numbered company or a named company. Both options have their pros and cons, and it’s important to understand them before making a decision.
A numbered company is a corporation that is identified by a number rather than a name. The number is assigned by the Ministry of Government and Consumer Services when the corporation is incorporated. For example, if the first numbered company incorporated in Ontario in a given year is ABC 1234567 Ontario Inc., the second would be ABC 1234568 Ontario Inc., and so on.
- Anonymity: A numbered company provides anonymity as it doesn’t reveal the owner’s name or the nature of the business. This can be advantageous if privacy is important to the owner.
- Flexibility: A numbered company allows the owner to change the business’s name at any time by filing an amendment with the government. This can be useful if the owner wants to rebrand or change the focus of the business.
- Cost: Incorporating a numbered company is generally less expensive than incorporating a named company.
- Lack of Distinctiveness: A numbered company doesn’t have a unique name, making it difficult to distinguish from other businesses.
- Branding: It may be difficult to build a brand around a numbered company.
A named company is a corporation that is identified by a unique name chosen by the owner. The name must comply with certain guidelines set out by the government and be approved by the Ministry of Government and Consumer Services before it can be used.
- Branding: A named company allows the owner to create a unique and distinctive brand that can help distinguish the business from its competitors.
- Memorability: A memorable name can help with marketing efforts and make the business easier for customers to remember.
- Professionalism: A named company can convey a sense of professionalism and legitimacy.
- Cost: Incorporating a named company is generally more expensive than incorporating a numbered company.
- Name Availability: There is a risk that the desired name may already be in use or not meet the government’s guidelines, which can lead to delays and additional costs.
- Privacy: A named company requires the disclosure of the owner’s name and the nature of the business, which may not be desirable if privacy is important to the owner.
Ultimately, the decision to choose a numbered or named company depends on the owner’s specific circumstances and goals. A numbered company may be suitable for those who prioritize anonymity and flexibility, while a named company may be more suitable for those who prioritize branding and professionalism. It’s important to consult with a lawyer or accountant to determine which option is best for your business.