Most new entrepreneurs and business owners get this all wrong.

We file a lot of first-time trademark applications, and for most of them, a corporation is listed as the owner. This means that incorporation is happening before trademarking, and that’s backwards.

Trademarking should happen well before incorporation.

Most new businesses start as sole proprietorships or partnerships. That means you, or you and someone else, are selling products or services to customers. There is no legal distinction between you and your business.

When you incorporate, you create a separate legal entity for your business. There are a number of reasons to incorporate, including obtaining a better tax rate for your business income or sheltering you personally from liability for your business activities. A corporation is also a great vehicle for multiple owners to share in a business.

Business owners usually take the steps to incorporate after they’ve been in business for a couple of years. The tax and filing requirements on corporations is very different compared to individuals, and you would typically want a certain level of income before these additional costs make sense for your business.   

Trademarking is claiming the right to own the name that you are using or are planning to use in connection with your business.

If you’ve waited until you’ve been in business for a couple of years to trademark your company name, you’ve waited too long.

The best time to trademark is before you start selling products or services to the public.

Waiting puts your ownership of the name at risk.

If someone else files a trademark application for your name (or a name that is very similar) before you file your application, the costs to you increase exponentially. This is because the Canadian IP Office assumes the first person or company to file an application to be the one who is entitled to obtain the trademark registration. A person or company who has earlier use in Canada can oppose that earlier filed trademark application, but opposition proceedings take a long time and cost a lot of money. In many cases, its cheaper to just re-brand your business.

The safest and least expensive approach is to apply to trademark your name as soon as you decide you will use it in connection with your business, even if you don’t yet have a legal corporation for your business.

File your trademark application in your personal name and when it’s the right time to incorporate your business, you can transfer ownership of your trademarks to your business.

Markably® provides a headache-free way to trademark your company name in Canada. Get started for free today.