If you are commencing a lawsuit against a unincorporated business, do you know how to name them correctly on the claim? It may sound like a simple concept but not everyone understands the process to ensure the proper business name is used or the implications of using an incorrect name.
When determining what to name a partnership or sole proprietorship in a claim it is important to know the difference between them and how to find their business name.
On the one hand, a partnership is comprised of two or more individuals that operate together with a common goal in mind. When it comes to naming a partnership as a defendant on a claim the plaintiff may commence a proceeding by using the partnerships “firm name” or “carrying on business as” name. When a partnership is named in this way, they are prohibited from defending the allegations contained in the claim as individuals and must respond together under the firm name. There are exceptions to almost every rule and a partner within the named partnership may defend the claim separately, but only with leave of the Court.
On the other hand, the simple difference between a partnership and a sole proprietorship is that a sole proprietorship has only one owner. But the same rules apply when naming a sole proprietorship as with naming a partnership in the sense that a plaintiff can use the “carrying on business as” name when commencing a proceeding against the business.
To determine the correct business name to use in a claim you need to understand how to go about finding the correct business name. In Ontario and in accordance with the Business Names Act when the partnership or sole proprietorship set up shop, they must register the business name they plan to use to identify themselves to the public. Once their business name is registered it will be added to the “business name registry” which is their official “carrying on business as” name that the plaintiff can use to commence a proceeding against them. In the event that they do not properly register their business name in Ontario, the plaintiff may still sue the partnership or sole proprietorship by naming them as the business name used when carrying on business.
If a business is incorrectly named in the claim any order or remedy granted by the Court for or against the business may not be enforceable and the plaintiff may need to correct the naming of the business which adds additional unnecessary steps to the litigation process.
The bottom line is you can commence a proceeding against a partnership or a sole proprietorship by using their “carrying on business as” name but that best practice is to confirm their registered business name by searching the public records to confirm the registered name of the business prior to proceeding with a claim against them to avoid a potential costly mistake.
More information? We’re here to help – [email protected] This WARDS LAWYERS PC publication is for general information only. It is not legal advice, nor is it intended to be. Specific or more information may be necessary before advice could be provided for your particular circumstances.
