A Rose Is Not Necessarily A Rose By Any Other Name
You have just started your new business. After talking to an accountant, you incorporated a company, and because it was easier not to go through the hassle of a name search, it was a numbered company. You printed business cards, invoices, stationery and even applied a decal to your van – all showing the name of your business. As an example, you created “Malahat Restoration Services”. All good to go, right?
Not necessarily. Your accountant advised you to incorporate for a variety of reasons but one essential reason was to limit your personal liability. However, if you do not make it clear that your customers are dealing with the company and not you personally, you may find yourself personally facing the obligation to pay a former customer.
According to section 27 of the Business Corporations Act, the company name (not the business name) must be placed in a conspicuous place where it carries on business, and shown on all contracts and business stationery. While the Business Corporations Act does not spell out what will happen if these requirements are not followed, the courts have.
In Pageant Media Ltd. v. Piche 2012 BCSC 2152, Pageant Media sued Piche on an unpaid bill for work done for his business. Piche’s business was CWC Gaming S.A. (indicating that it was a limited company where it was incorporated) but all if its invoices, business cards and stationery only referred to CWC Gaming or CWC. Piche applied to have Pageant Media’s claim thrown out on the basis that it was his company that owed the money, not him personally.
The judge disagreed. Because the company did not make it clear that the customer was dealing with a company as opposed to a person, the judge held Piche to be responsible for the claim and allowed the claim to proceed.
You do not need to put, for example, 123456 BC Ltd. doing business as Malahat Restoration Services on the same line or in the same font size. It is sufficient to put in something like “Malahat Restoration Services, a division of 123456 BC Ltd.”
This little precaution can save you considerable headaches as your business grows.