Change of Business Name

Approximately 30 years ago, you started a masonry business.  You decided to call this company “Smith’s Masonry Services”.  Business was good so you started to look at adding different business lines.  You found that there was a need for masonry in the assembly of fireplaces.  Things further evolve and you notice that there is a demand for the installation of the fireplaces.  As years pass on your firm is capable of installing fireplaces.  Business is booming, in fact there are so many requests for the installation of fireplaces, that your original masonry business is almost inactive.  Because of this change in business your company’s name may be somewhat misleading.

How does a business change their Company’s name?

In British Columbia, there are two steps.  The first step is to request a name approval.  This step is to ensure the public is not confused or misled by similar corporate names.  New corporate names must be approved by the Corporate Registry.  Before making application for the name approval, one should conduct an online search of the registered BC companies and organizations database on BC Online to ensure that new business name is not already taken.

The second step is file a change of corporate name.  In order to submit the application through Corporate Online you will need your incorporation number, company password and Customer Profile ID.  If you do not have a Customer Profile ID, you need to create one on Corporate Online before you can file the change of the company name.  Also, companies must be in good standing with all filings up-to-date before altering the company name.

As per the Government of British Columbia Website, these are the 3 most common reasons why names are not approved:

  1. Name is too similar to an existing corporate name within the same industry.
  2. Research was not conducted before applying to make sure the name wasn’t already in use.
  3. Name lacks a distinctive and/or descriptive element.

 

Can You Modify a Contract Without Consideration?

Imagine that you lend $100.00 to a friend named Sally, so that she can buy a car. You are a good friend and you agree to lend Sally the money interest-free. You ask to be paid back the full amount within a year. When the year is up, you ask for your money back from Sally. However, Sally is still in a tight spot and she asks if she can have another year to pay you back. Due to your gracious nature, you agree to the extension of the loan. This cycle happens for another few years, where Sally always asks if she can pay you back next year. Finally, after Sally refuses to pay you back the loan, you become frustrated and sue Sally to get your money back. In her defence, Sally says that you have waited too long, and that your claim for your money is barred as the limitation period has expired.

Sally’s argument in Court is that the limitation period started to run after the first year was up, since this is when you first demanded the loan back. This means, that since you waited longer than two years to sue, the limitation period has expired and consequently you cannot sue. Further, Sally is arguing that because she did not give you any fresh consideration (i.e. some benefit for modifying the terms of the contract), that her promises to pay you back in the following years do not modify the original terms of the loan.

This is exactly what happened to the Plaintiff in the recent BC case of Rosas v Toca, 2018 BCCA 191. When Rosas sued Toca in the BC Supreme Court, the Court found that Rosas was barred from pursuing her claim against Toca, as the limitation period had expired. Further the Court found that because Ms. Toca was already under an obligation to pay back to the loan, her further promises to pay were not enforceable. Ms. Rosas appealed to the British Columbia Court of Appeal.

The BC Court of Appeal found that Ms. Rosas could rely on the promises of Ms. Toca to pay back the loan. This case is interesting, as it signals an important change in the law. The Court found that there was an evolution in the law regarding the doctrine of consideration in the context of contract modifications. The Court found

[176]  In the final analysis, I am persuaded that the legitimate expectations of the parties in the case of a modification to a going transaction should be protected. This is the motivating premise in the many cases where courts have struggled to find “consideration” so as to do justice between the litigants. It is but an incremental evolution of the law to say that in these cases, in the absence of duress, unconscionability or other proper policy considerations, such modifications should be enforceable            

[emphasis added]

Specifically, the Court held that Toca’s promises to pay back the loan every year were made in the absence of duress, unconscionability or other proper policy considerations. For this reason, the Court found that the promises to pay back the loan were enforceable, in spite of the fact that Toca did not give Rosas any further consideration for the extension of the loan. The last promise that Toca made to Rosas was inside of the limitation period, which means that the terms of the original loan were modified and Rosas could rely on the promises to pay back the loan.

Overall, the implications of this case could be far reaching, as it means that contracts are able to be modified without fresh consideration between the parties. In the words of the Court, “in absence of duress, unconscionability or other proper policy considerations”, such modifications to a contract should be enforceable.