I take it you don't have your name registered? That is the first thing I did. Contact the Companies Office near you and register your name. Yes if she has registered the name before you then you can no longer use it and it is against the law for you to continue to do so. If she hasn't registered it yet and you do so before her you can contact her and let her know that she can no longer use that name.
I had someone in our area use my name. Her ad was almost identical to mine as well. She just took mine and made a few changes. I contacted the Companies Office. They said I could make a complaint if I wanted. I decided instead to contact the daycare directly and tell her that she was using a name that was registered. She quickly took her add down.
When you register your name there is the possibility that you might not even be able to use it if it is similar to someone's business (doesn't have to be a daycare either). For example - ABC Daycare is registered and someone tries to register ABC123 Daycare will likely get rejected as they are too similar and could cause confusion.
Anyone who advertises a business and name's it should be registering their name. I don't think it was too much - $75 I think and then $40 or so every 3 years to renew it.
Yes, if you registered your name first and she hasn't registered hers she might not realize the legalities.
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