Vol. 144, No. 8 — April 14, 2010

Registration

SOR/2010-72 March 25, 2010

CANADA BUSINESS CORPORATIONS ACT
CANADA COOPERATIVES ACT

Regulations Amending Certain Department of Industry Regulations

P.C. 2010-392 March 25, 2010

Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry, hereby makes the annexed Regulations Amending Certain Department of Industry Regulations pursuant to

(a) section 261 (see footnote a) of the Canada Business Corporations Act (see footnote b);

(b) section 372 (see footnote c) of the Canada Cooperatives Act (see footnote d).

REGULATIONS AMENDING CERTAIN DEPARTMENT OF INDUSTRY REGULATIONS

CANADA BUSINESS CORPORATIONS ACT

CANADA BUSINESS CORPORATIONS REGULATIONS, 2001

1. Part 2 of the Canada Business Corporations Regulations, 2001 (see footnote 1) is replaced by the following:

PART 2

CORPORATE NAMES

INTERPRETATION

17. (1) The following definitions apply in this Part.

“corporate name” means the name of a corporation. (Version anglaise seulement)

“distinctive”, in relation to a trade-name, considered as a whole and by its separate elements, means a trade-name that distinguishes the business in association with which it is used or intended to be used by its owner from any other business or that is adapted to so distinguish them. (distinctive)

“official mark” means an official mark referred to in subparagraph 9(1)(n)(iii) of the Trade-marks Act. (marque officielle)

“trade-mark” means a trade-mark as defined in section 2 of the Trade-marks Act. (marque de commerce)

“trade-name” means a name that has been reserved by the Director under subsection 11(1) of the Act, or the name under which a business is carried on, or intended to be carried on, whether it is a corporate name or the name of a body corporate, trust, partnership, sole proprietorship or individual. (dénomination commerciale)

“use” means the actual use by a person that carries on business in Canada or elsewhere. (emploi)

(2) For greater certainty, this Part applies to the corporate name of an amalgamated corporation.

CONFUSING NAMES

18. A corporate name is confusing with

(a) a trade-mark or an official mark if it is the same as that trade-mark or official mark or if the use of both the corporate name and either the trade-mark or the official mark, as the case may be, is likely to lead to the inference that the business carried on or intended to be carried on under the corporate name and the business connected with the trade-mark or official mark, as the case may be, are one business, whether or not the nature of the business of each is generally the same; or

(b) a trade-name if it is the same as that trade-name or if the use of both names is likely to lead to the inference that the business carried on or intended to be carried on under the corporate name and the business carried on under the trade-name are one business, whether or not the nature of the business of each is generally the same.

19. For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if its use causes confusion with a trade-mark, official mark or trade-name, having regard to the circumstances, including

(a) the inherent distinctiveness of the whole or any element of the trade-mark, official mark or trade-name and the extent to which it has become known;

(b) the length of time that the trade-mark, official mark or trade-name has been in use;

(c) the nature of the goods, services or business with which the trade-mark, official mark or trade-name is associated;

(d) the nature of the trade with which the trade-mark, official mark or trade-name is associated;

(e) the degree of resemblance between the proposed corporate name and the trade-mark, official mark or trade-name in appearance or sound or in the ideas suggested by them; and

(f) the geographical area in Canada in which the trade name or proposed corporate name is likely to be used.

20. Despite section 19, a corporate name that is confusing with the name of a body corporate that has not carried on business in the two years immediately before the day on which the Director receives the documents referred to in subsection 8(1), section 178 or subsection 185(4), 187(4), 191(5), 192(7) or 209(3) of the Act or a request to reserve a name under subsection 11(1) of the Act is not prohibited for that reason alone if

(a) the body corporate has been dissolved; or

(b) in the case of a body corporate that has not been dissolved, it consents in writing to the use of the name and undertakes in writing to dissolve immediately or to change its name before the corporation that proposes to use the name begins using it.

21. Despite section 19, if a word in a corporate name is confusing with the distinctive element of a trade-mark, official mark or trade-name, the corporate name is not prohibited for that reason alone if the person who owns the trade-mark, official mark or trade-name consents in writing to the use of the corporate name.

22. (1) Despite section 19, a corporate name that is confusing with the name of a body corporate is not prohibited for that reason alone if

(a) the corporate name is the name of an existing or a proposed corporation that is the successor to the business of the body corporate and the body corporate has ceased or will, in the immediate future, cease to carry on business under that corporate name and undertakes in writing to dissolve or to change its name before the successor corporation begins carrying on business under that name; and

(b) the corporate name of the existing or proposed corporation sets out in numerals the year of incorporation, or the year of the most recent amendment to the corporate name, in parentheses, immediately before the word or expression “Limited”, “Limitée”, “Incorporated”, “Incorporée”, “Corporation”, “Société par actions de régime fédéral” or “Société commerciale canadienne” or the abbreviation “Ltd.”, “Ltée”, “Inc.”, “Corp.”, “S.A.R.F.” or “S.C.C.”.

(2) If a corporate name is changed so that the reference to the year of incorporation or the year of the most recent amendment to the corporate name is deleted at least two years after it is introduced, it is not prohibited for that reason alone.

23. Despite section 19, if the corporate name of an amalgamated corporation is the same as the name of one of the amalgamating corporations, it is not prohibited for that reason alone.

24. (1) Despite section 19, the corporate name of an existing corporation that is the same as the name of an affiliated body corporate from which the corporation has acquired or will, in the immediate future, acquire all or substantially all of the property of the body corporate is not prohibited for that reason alone if the body corporate undertakes in writing to dissolve, or to change its name, before the corporation begins using the corporate name.

(2) Despite section 19, if the corporate name of a proposed corporation is the same as the name of a body corporate that is to be an affiliate of the proposed corporation from which the proposed corporation will, in the immediate future, acquire all or substantially all of the property of the body corporate, the corporate name is not prohibited for that reason alone if the body corporate undertakes in writing to dissolve, or to change its name, before the proposed corporation begins using the corporate name.

GENERAL PROHIBITIONS

25. For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if the name contains any of the following elements:

(a) “cooperative”, “coopérative”, “co-op” or “pool”, if it connotes a cooperative venture;

(b) “Parliament Hill” or “Colline du Parlement”;

(c) “Royal Canadian Mounted Police”, “Gendarmerie royale du Canada”, “RCMP” or “GRC”; and

(d) “United Nations”, “Nations Unies”, “UN” or “ONU”, if it connotes a relationship to the United Nations.

26. For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it connotes that the corporation

(a) carries on business under royal, vice-regal or governmental patronage, approval or authority, unless Her Majesty or a person, society, authority or organization referred to in paragraph 9(2)(a) of the Trade-marks Act consents in writing to the use of the name;

(b) is sponsored or controlled by or is connected with the Government of Canada, the government of a province, the government of a country other than Canada or a political subdivision or agency of any such government, unless the appropriate government, political subdivision or agency consents in writing to the use of the name;

(c) is sponsored or controlled by or is connected with a university or an association of accountants, architects, engineers, lawyers, physicians or surgeons or another professional association recognized by the laws of Canada or a province, unless the appropriate university or professional association consents in writing to the use of the name;

(d) carries on the business of a bank, loan company, insurance company, trust company or another financial intermediary that is regulated by the laws of Canada, unless the Superintendent of Financial Institutions consents in writing to the use of the name; or

(e) carries on the business of a stock exchange that is regulated by the laws of a province, unless the relevant provincial securities regulator consents in writing to the use of the name.

27. For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it contains a word or phrase, or connotes a business, that is obscene.

28. For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if an element of the name is the family name of an individual, whether or not preceded by their given name or initials, unless the individual or their heir or personal representative consents in writing to the use of their name and the individual has or had a material interest in the corporation.

29. For greater certainty, a corporate name is not prohibited only because it contains alphabetic or numeric characters, initials, punctuation marks or any combination of those elements.

NON-DISTINCTIVE NAMES

30. (1) For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it

(a) is only descriptive, in any language, of the business of the corporation, of the goods and services in which the corporation deals or intends to deal, or of the quality, function or other characteristic of those goods and services;

(b) is primarily or only the name or family name, used alone, of an individual who is living or has died within 30 years before the day on which the Director receives any of the documents referred to in subsection 8(1), section 178 or subsection 185(4), 187(4), 191(5), 192(7) or 209(3) of the Act or a request to reserve a name under subsection 11(1) of the Act; or

(c) is primarily or only a geographic name that is used alone.

(2) Subsection (1) does not apply if a person proposing to use the corporate name establishes that it has been used in Canada or elsewhere by them or by their predecessors so as to have become distinctive in Canada on the day referred to in paragraph (1)(b).

DECEPTIVELY MISDESCRIPTIVE NAMES

31. For the purpose of paragraph 12(1)(a) of the Act, a corporate name is deceptively misdescriptive if it is likely to mislead the public, in any language, with respect to any of the following:

(a) the business, goods or services in association with which it is proposed to be used;

(b) the conditions under which the goods or services will be produced or supplied or the persons to be employed in the production or supply of the goods or services; and

(c) the place of origin of the goods or services.

32. For the purpose of subsection 10(3) of the Act, a combined English and French form of the name of a corporation shall include, from among the words and expressions set out in subsection 10(1) of the Act, only the expression “Inc.” which is to be placed at the end of the corporate name.

2. The Regulations are amended by adding the following after Part 8:

PART 8.1

FUNDAMENTAL CHANGES

72.1 (1) Despite subparagraph 184(1)(b)(ii) of the Act, the resolutions approving the amalgamation of a holding corporation with one or more of its subsidiary corporations may provide that the corporate name set out in the articles of amalgamation is not the same as that set out in the articles of the amalgamating holding corporation.

(2) Despite subparagraph 184(2)(b)(ii) of the Act, the resolutions approving the amalgamation of two or more wholly owned subsidiary corporations of the same holding body corporate may provide that the corporate name set out in the articles of amalgamation is not the same as that set out in the articles of the amalgamating subsidiary corporation whose shares are not cancelled.

CANADA COOPERATIVES ACT

CANADA COOPERATIVES REGULATIONS

3. Part 2 of the Canada Cooperatives Regulations (see footnote 2) is replaced by the following:

PART 2

COOPERATIVE NAMES

INTERPRETATION

8. (1) The following definitions apply in this Part.

“distinctive”, in relation to a trade-name, considered as a whole and by its separate elements, means a trade-name that distinguishes the business in association with which it is used or intended to be used by its owner from any other business or that is adapted to so distinguish them. (distinctive)

“official mark” means an official mark referred to in subparagraph 9(1)(n)(iii) of the Trade-marks Act. (marque officielle)

“trade-mark” means a trade-mark as defined in section 2 of the Trade-marks Act. (marque de commerce)

“trade-name” means a name that has been reserved by the Director under section 22 of the Act, or the name under which a business is carried on, or intended to be carried on, whether it is a corporate name or the name of a body corporate, trust, partnership, sole proprietorship or individual. (dénomination commerciale)

“use” means the actual use by a person that carries on business in Canada or elsewhere. (emploi)

(2) For greater certainty, this Part applies to the cooperative name of an amalgamated cooperative.

CONFUSING NAMES

9. A cooperative name is confusing with

(a) a trade-mark or official mark if it is the same as that trade-mark or official mark or if the use of both the cooperative name and either the trade-mark or the official mark, as the case may be, is likely to lead to the inference that the business carried on or intended to be carried on under the cooperative name and the business connected with the trade-mark or official mark, as the case may be, are one business, whether or not the nature of the business of each is generally the same; or

(b) a trade-name if it is the same as that trade-name or if the use of both names is likely to lead to the inference that the business carried on or intended to be carried on under the cooperative name and the business carried on under the trade-name are one business, whether or not the nature of the business of each is generally the same.

10. For the purpose of paragraph 23(a) of the Act, a cooperative name is prohibited if its use causes confusion with a trade-mark, official mark or trade-name, having regard to the circumstances, including

(a) the inherent distinctiveness of the whole or any element of the trade-mark, official mark or trade-name and the extent to which it has become known;

(b) the length of time that the trade-mark, official mark or trade-name has been in use;

(c) the nature of the goods, services or business with which the trade-mark, official mark or trade-name is associated;

(d) the nature of the trade with which the trade-mark, official mark or trade-name is associated;

(e) the degree of resemblance between the proposed cooperative name and the trade-mark, official mark or trade-name in appearance or sound or in the ideas suggested by them; and

(f) the geographical area in Canada in which the trade name or proposed cooperative name is likely to be used.

11. Despite section 10, a cooperative name that is confusing with the name of a body corporate that has not carried on business in the two years immediately before the day on which the Director receives the articles referred to in paragraph 10(a), subsection 285(4) or (5), section 292 or subsection 299(4), 303(6), 305(1) or 308(3) of the Act or a request to reserve a name under section 22 of the Act is not prohibited for that reason alone if

(a) the body corporate has been dissolved; or

(b) in the case of a body corporate that has not been dissolved, it consents in writing to the use of the name and undertakes in writing to dissolve immediately or to change its name before the cooperative that proposes to use the name begins using it.

12. Despite section 10, if a word in a cooperative name is confusing with the distinctive element of a trade-mark, official mark or trade-name, the cooperative name is not prohibited for that reason alone if the person who owns the trade-mark, official mark or trade-name consents in writing to the use of the cooperative name.

13. (1) Despite section 10, a cooperative name that is confusing with the name of a body corporate is not prohibited for that reason alone if

(a) the cooperative name is the name of an existing or a proposed cooperative that is the successor to the business of the body corporate and the body corporate has ceased or will, in the immediate future, cease to carry on business under that cooperative name and undertakes in writing to dissolve or to change its name before the successor cooperative begins carrying on business under that name; and

(b) the cooperative name of the existing or proposed cooperative sets out in numerals the year of incorporation, or the year of the most recent amendment to the cooperative name, in parentheses.

(2) If a cooperative name is changed so that the reference to the year of incorporation or the year of the most recent amendment to the cooperative name is deleted at least two years after it is introduced, it is not prohibited for that reason alone.

14. Despite section 10, if the cooperative name of an amalgamated cooperative is the same as the name of one of the amalgamating cooperatives, it is not prohibited for that reason alone.

15. (1) Despite section 10, the cooperative name of a cooperative that is the same as the name of an affiliated body corporate from which the existing cooperative has acquired or will, in the immediate future, acquire all or substantially all of the property of the body corporate is not prohibited for that reason alone if the body corporate undertakes in writing to dissolve, or to change its name, before the existing cooperative begins using the cooperative name.

(2) Despite section 10, if the cooperative name of a proposed cooperative is the same as the name of a body corporate that is to be an affiliate of the proposed cooperative from which the proposed cooperative will, in the immediate future, acquire all or substantially all of the property of the body corporate, the cooperative name is not prohibited for that reason alone if the body corporate undertakes in writing to dissolve, or to change its name, before the proposed cooperative begins using the cooperative name.

GENERAL PROHIBITIONS

16. For the purpose of paragraph 23(a) of the Act, a cooperative name is prohibited if the name contains any of the following elements:

(a) “Parliament Hill” or “Colline du Parlement”;

(b) “Royal Canadian Mounted Police”, “Gendarmerie royale du Canada”, “RCMP” or “GRC”; and

(c) “United Nations”, “Nations Unies”, “UN” or “ONU”, if it connotes a relationship to the United Nations.

17. For the purpose of paragraph 23(a) of the Act, a cooperative name is prohibited if it connotes that the cooperative

(a) carries on business under royal, vice-regal or governmental patronage, approval or authority, unless Her Majesty or a person, society, authority or organization referred to in paragraph 9(2)(a) of the Trade-marks Act consents in writing to the use of the name;

(b) is sponsored or controlled by or is connected with the Government of Canada, the government of a province, the government of a country other than Canada or a political subdivision or agency of any such government, unless the appropriate government, political subdivision or agency consents in writing to the use of the name;

(c) is sponsored or controlled by or is connected with a university or an association of accountants, architects, engineers, lawyers, physicians or surgeons or another professional association recognized by the laws of Canada or a province, unless the appropriate university or professional association consents in writing to the use of the name;

(d) carries on the business of a bank, a loan company, an insurance company, a trust company or another financial intermediary that is regulated by the laws of Canada, unless the Superintendent of Financial Institutions consents in writing to the use of the name; or

(e) carries on the business of a stock exchange that is regulated by the laws of a province, unless the relevant provincial securities regulator consents in writing to the use of the name.

18. For the purpose of paragraph 23(a) of the Act, a cooperative name is prohibited if it contains a word or phrase, or connotes a business, that is obscene.

19. (1) For the purpose of paragraph 23(a) of the Act, a cooperative name is prohibited if an element of the name is the family name of an individual, whether or not preceded by their given name or initials, unless the individual or their heir or personal representative consents in writing to the use of their name and, subject to subsection (2), the individual has or had a material interest in the cooperative.

(2) The individual is not required to have or to have had a material interest in the cooperative if Part 20 of the Act applies to the cooperative or the individual is a recognized cooperative leader.

20. For greater certainty, a cooperative name is not prohibited only because it contains alphabetic or numeric characters, initials, punctuation marks or any combination of those elements.

NON-DISTINCTIVE NAMES

21. (1) For the purpose of paragraph 23(a) of the Act, a cooperative name is prohibited if it

(a) is only descriptive, in any language, of the business of the cooperative, of the goods and services in which the cooperative deals or intends to deal, or of the quality, function or other characteristic of those goods and services;

(b) is primarily or only the name or family name, used alone, of an individual who is living or has died within 30 years before the day on which the Director receives the articles referred to in paragraph 10(a), subsection 285(4) or (5), section 292, subsection 299(4), 303(6), 305(1) or 308(3) of the Act or a request to reserve a name under section 22 of the Act; or

(c) is primarily or only a geographic name that is used alone.

(2) Subsection (1) does not apply if a person proposing to use the cooperative name establishes that it has been used in Canada or elsewhere by them or by their predecessors so as to have become distinctive in Canada on the day referred to in paragraph (1)(b).

DECEPTIVELY MISDESCRIPTIVE NAMES

22. For the purpose of paragraph 23(a) of the Act, a cooperative name is deceptively misdescriptive if it is likely to mislead the public, in any language, with respect to any of the following:

(a) the business, goods or services in association with which it is proposed to be used;

(b) the conditions under which the goods or services will be produced or supplied or the persons to be employed in the production or supply of the goods or services; and

(c) the place of origin of the goods or services.

23. For the purpose of subsection 20(4) of the Act, a combined English and French form of the name of a proposed cooperative shall include only one of the words or expressions listed in subsection 20(1) of the Act.

4. The Regulations are amended by adding the following after Part 4:

PART 4.1

FUNDAMENTAL CHANGES

38.1 Despite subparagraph 298(1)(b)(ii) of the Act, the resolutions approving the amalgamation of a holding cooperative with one or more of its wholly owned subsidiary cooperatives may provide that the cooperative name set out in the articles of amalgamation is not the same as that set out in the articles of the amalgamating holding cooperative.

COMING INTO FORCE

5. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue and objectives

The Standing Joint Committee on the Scrutiny of Regulations (SJCSR) reviews matters of legality and the procedural aspects of federal regulations. The SJCSR has reviewed the Canada Business Corporations Regulations, 2001 (CBCR) and the Canada Cooperatives Regulations (Coop Regulations) and some issues have been raised. The regulations address the issues related to Part 2 (corporate names) of both the CBCR and Coop Regulations and propose to add a new section 72.1 to the CBCR and a new section 38.1 to the Coop Regulations. Further changes to the CBCR and to the Coop Regulations may be proposed at a later time to address other concerns raised by SJCSR.

The objective of the changes is to clarify the rules for the granting of names to corporations and cooperatives. The regulations should be clearer and easier to read while resolving any concerns with the drafting language used. This also includes a new section in both sets of Regulations to resolve concerns about the name of a corporation or cooperative resulting from a short-form amalgamation.

Description and rationale

The Canada Business Corporations Act (CBCA) and its Regulations (CBCR) and the Canada Cooperatives Act (Coop Act) and its Regulations (Coop Regulations) provide the corporate governance framework, including name granting rules, for corporations and cooperative incorporated or continued under their respective act.

The name-granting rules are similar for corporations and for cooperatives and are found in Part 2 of both sets of regulations.

In its review of the CBCR and the Coop Regulations, the SJCSR identified grammatical errors, and, in their opinion, highlighted some sections that contained unclear references to the respective acts. Instead of trying to address individual aspects from the SJCSR’s review, the regulations will rewrite Part 2 in both the CBCR and the Coop Regulations. These changes do not make substantive changes to the name granting regulations. Instead, they make these rules clearer and easier to read while resolving the SJCSR’s concerns. In particular, the sections in Part 2 will be rearranged to provide a more logical approach.

The approach is to first provide the provisions related to the interpretation of Part 2. The next set of provisions sets out the concept of “confusing names” and related provisions, including the exceptions to that concept. The following set of provisions is related to general prohibitions for corporate names (e.g. prohibition on the phrase “Parliament Hill” and on names connoting royal patronage). The final set of provisions concerns non-distinctive and deceptively misdescriptive names.

Another amendment adds a new section 72.1 in the CBCR and a new section 38.1 in the Coop Regulations. Those sections will permit a corporation or cooperative resulting from a vertical short-form amalgamation to have any approved corporate name and not be restricted to the corporate name of the holding corporation or cooperative. Also, a corporation resulting from a horizontal short-form amalgamation will not be limited to the corporate name of the amalgamating corporation whose shares are not cancelled. The amendments will give more flexibility to the corporations or cooperatives regarding the choice of the corporate name in an amalgamation case.

Consultation

The proposed amendments were pre-published on November 28, 2009, in the Canada Gazette, Part I. A notice was also sent by email to 3 500 stakeholders. A 30-day comment period was provided and no comments were received; consequently, no issues with the proposed regulations have been raised.

Consultations were also conducted in the spring of 2009. On May 12, 2009, a notice was put on Corporations Canada’s Web site about regulatory amendments being considered for the CBCR that would replace Part 2 (corporate names) and add a new section 72.1 to the CBCR. This notice was also sent by email to 3 500 stakeholders. A 45-day comment period was provided and no comments were received.

Contact

Isabelle Breault
Corporations Canada
Industry Canada
Jean Edmonds Tower South, 9th Floor
365 Laurier Avenue West
Ottawa, Ontario
K1A 0C8
Telephone: 613-941-5753
Fax: 613-941-5781
Email: Isabelle.Breault@ic.gc.ca

Footnote a
S.C. 2001, c. 14, s. 125

Footnote b
R.S., c. C-44; S.C. 1994, c. 24, s. 1

Footnote c
S.C. 2001, c. 14, s. 227

Footnote d
S.C. 1998, c. 1

Footnote 1
SOR/2001-512

Footnote 2
SOR/99-256

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