New Business Entity vs. Using a DBA

When purchasing an existing company, buyers often face a critical decision: should they set up a new business entity or operate under a “Doing Business As” (DBA) name? Both options have distinct legal, tax, and liability implications. Understanding these differences can help buyers protect their assets and maximize tax advantages.

1. Understanding a DBA vs. a New Business Entity

A DBA, or “Doing Business As,” is a registered business name that allows an individual or existing entity to conduct business under a different name without creating a separate legal entity. A DBA does not provide liability protection or tax benefits beyond those available to the individual or parent company that owns it.

On the other hand, forming a new business entity—such as a Limited Liability Company (LLC), Corporation (S-Corp or C-Corp), or Limited Partnership—creates a legally distinct entity separate from its owners. This structure provides liability protection and can offer tax advantages depending on the entity type.

2. Tax Differences Between a DBA and a New Entity

DBA (Sole Proprietorship or Part of an Existing Entity)

• A DBA itself does not have a separate tax identity; taxes are filed under the owner’s personal tax return.
• If an individual operates under a DBA as a sole proprietorship, all business profits and losses pass through to the owner’s personal tax return and are subject to self-employment taxes.
• If the DBA is under an existing LLC or Corporation, the business income is taxed according to the structure of that parent entity.

New Business Entity (LLC, S-Corp, C-Corp)

• An LLC offers pass-through taxation, meaning profits and losses pass to the owner’s personal tax return, like a DBA. However, an LLC can elect to be taxed as an S-Corp, reducing self-employment taxes.
• An S-Corporation also provides pass-through taxation but allows owners to receive part of their income as distributions, which are not subject to self-employment tax.
• A C-Corporation is taxed separately from its owners, meaning profits are taxed at the corporate level, and any dividends distributed to owners are taxed again (double taxation). However, C-Corps may offer lower corporate tax rates and benefits like retained earnings.

3. Liability and Legal Protection

One of the biggest differences between a DBA and a new entity is how liability is handled.

DBA (No Liability Protection)

• A DBA offers no legal separation between the business and its owner.
• If the company faces a lawsuit or accrues debt, the owner is personally liable, meaning personal assets such as homes and bank accounts could be at risk.
• If the DBA operates under an existing LLC or Corporation, liability protection comes from the parent entity, but only if corporate formalities are maintained.

New Business Entity (Liability Protection)

• An LLC, Corporation, or Limited Partnership creates a separate legal entity, shielding the owner’s personal assets from business debts and lawsuits.
• If the business is sued or defaults on debts, the owner’s liability is typically limited to the amount invested in the company.
• Business entities provide stronger legal protection against liability claims compared to a DBA.

4. Which Option Is Best When Purchasing a Company?

Use a DBA If:

• The business being purchased is small, with minimal risk of liability.
• The buyer already has an established business and wants to add a new trade name without creating a separate legal entity.
• The priority is to simplify administration and reduce paperwork.

Form a New Business Entity If:

• The purchased business involves significant liabilities, contracts, or employees.
• The buyer wants to protect personal assets from potential lawsuits or debts.
• The business has long-term growth plans that require a structured entity for funding and tax efficiency.

While a DBA is a simple and cost-effective way to operate a business under a new name, it does not provide liability protection or tax benefits beyond what’s available through the owner’s existing tax structure. In contrast, setting up a new entity can offer greater legal protection and tax advantages, making it a better choice for buyers who want to mitigate risks and maximize financial benefits. Before deciding, consulting with a legal or tax professional is advisable to ensure the chosen structure aligns with the buyer’s business goals.  We do suggest an attorney who is familiar with this industry.  One option would be Ken Kirschenbaum of Kirschenbaum and Kirschenbaum – 516 747 6700 x 301, ken@kirschenbaumesq.com, www.KirschenbaumEsq.com

For professionals in the life safety and property protection industry—such as alarm and fire inspection technicians, encountering dogs on customer premises is a common challenge. While some pets are friendly and curious, others can be aggressive, especially when alarms are triggered, or unfamiliar individuals enter their territory. Ensuring personal safety while respecting the customer’s pet and their wishes is crucial to maintaining a professional and secure work environment.

Ken Kirschenbaum in a recent Newsletter was recently asked about the liability in a situation where a technician is bitten.  This important question led to this article which outlines best practices for dealing with dogs on customer premises, liability concerns, and how professionals can mitigate risks while upholding safety standards.

Dogs are protective by nature, and their reactions to an alarm technician’s presence can be unpredictable. Even a well-behaved dog may become stressed or aggressive when alarms sound or strangers enter their home. Key risks include:

• Bites and physical injury – Dogs may react aggressively to perceived threats.
• Allergic reactions – Some professionals may have allergies to pet dander.
• Interference with work – A dog’s curiosity or anxiety may disrupt inspections or installations.
• Liability issues – In the event of a dog bite, questions of liability and workers’ compensation arise.

Best Practices for Professional Safety and Customer Relations

Pre-Visit Communication

Before arriving at a customer’s home or business, clear communication can help prevent potential issues.

• Ask about pets – When scheduling the appointment, inquire if dogs or other animals will be present.
• Request proper containment – Politely request that dogs be secured in a separate room or area before arrival.
• Clarify company policies – If company policy prohibits working in a home where an unsecured dog is present, communicate this in advance to avoid conflicts.

On-Site Safety Precautions

Once on-site, technicians should take necessary precautions to ensure their safety:

• Assess the situation – Before entering, check for signs of an unsecured dog, such as barking or scratching at the door.
• Do not assume friendliness – Even if a customer insists their dog is friendly, always maintain a cautious approach.
• Avoid sudden movements – Move slowly and avoid actions that may startle the dog.
• Minimize noise disruptions – Explain to the customer that alarms may distress the dog and request that they secure their pet during testing.
• Carry deterrents if necessary – Some professionals carry dog deterrent spray as a last resort in case of an aggressive encounter.

Handling an Unsecured or Aggressive Dog

If a customer refuses to secure their pet, or if an aggressive dog is present, professionals should:

• Politely but firmly refuse service – If the customer does not contain the dog, inform them that the appointment cannot proceed due to safety concerns.
• Follow company policy – Ensure all technicians are aware of the company’s stance on handling pets in the workplace.
• Report incidents – If a dog bite occurs, document the incident immediately and seek medical attention if necessary.

Legal and Liability Considerations

According to legal expert Ken Kirschenbaum, employees injured by a customer’s pet may seek compensation through Workers’ Compensation. Additionally, they may have a legal claim against the property owner. However, employers cannot sue customers for lost work due to an employee’s injury.

Employers should:

• Ensure Workers’ Compensation coverage – This protects employees in case of injuries.
• Include pet-related clauses in service agreements – Contracts should state that customers must provide a safe work environment, including securing pets.
• Consult legal counsel – Businesses should review liability concerns with a legal expert to ensure proper risk management policies.

Respecting the Customer’s Wishes and Maintaining Professionalism

While safety is the priority, respecting the customer’s pet is also important for maintaining a positive relationship.

• Remain calm and professional – Avoid reacting negatively to a customer’s pet.
• Educate the customer – Politely explain why securing the pet is necessary for both safety and efficiency.
• Offer rescheduling options – If the customer is unwilling to contain their pet, offer to return at another time when the dog can be secured.

Dogs on customer premises pose a potential safety risk for alarm and fire inspection professionals. By implementing clear policies, communicating expectations with customers, and taking necessary precautions, companies can minimize the risk of injury while maintaining professionalism. Ultimately, prioritizing safety while respecting customer preferences fosters a positive working relationship and ensures a safe environment for all parties involved.

Also don’t forget to reach out to Ken Kirschebaum should you need contracts or forms for your business.  He can even add the correct clauses for just this type of situation.  Ken Kirschenbaum, Esq, Kirschenbaum & Kirschenbaum PC Attorneys at Law, 516 747 6700 x 301, ken@kirschenbaumesq.com, www.KirschenbaumEsq.com

The LLSSA community has lost a dedicated leader this week, Larry Comeaux of Acadiana Security Plus. His commitment to the life safety and property protection industry has been exemplary. Our sympathy and prayers go out to Cindy and the family as they navigate the days ahead. In looking at how to describe Larry there were no greater words we could find than those given when he received his lifetime achievement awards in this video.

Home security cameras have become an essential part of modern security systems, offering homeowners peace of mind by monitoring their property. However, improper installation can reduce their effectiveness and even create legal or privacy concerns. Here are seven critical rules to follow when setting up your home security cameras, along with locations you should avoid.

1. Cover Main Entry Points – The most crucial rule when installing security cameras is to monitor primary entry points such as front doors, back doors, and ground-floor windows. Studies show that most burglars enter through these locations, making them the top priority for camera placement.

2. Ensure High Placement to Prevent Tampering – Mounting cameras high enough to be out of reach helps prevent intruders from disabling or damaging them. Ideally, cameras should be placed at least 9 feet above the ground, ensuring a clear, wide-angle view while making it difficult for unauthorized individuals to interfere with them.

3. Avoid Intrusive or Illegal Locations – While security is essential, respecting privacy laws and ethical considerations is equally important. Avoid installing cameras in places where privacy is expected, such as bathrooms, bedrooms, or areas that could inadvertently capture your neighbors’ private spaces. Check local regulations to ensure compliance.

4. Use Cameras with Night Vision and Motion Detection – A security camera’s effectiveness depends on its ability to capture clear footage in low-light conditions. Investing in night vision cameras with motion detection capabilities enhances security by alerting homeowners to suspicious activity in real time, even at night.

5. Secure Your Camera Network – Cybersecurity is a crucial aspect of home surveillance. Ensure that your security camera system is protected by strong passwords, two-factor authentication, and encrypted connections. Updating firmware regularly and using a secure Wi-Fi network prevents hackers from accessing your system.

6. Angle Cameras for Maximum Coverage – Proper positioning is key to capturing the most useful footage. Cameras should be angled downward slightly to get a clear view of faces and movement. Avoid placing them in a way that creates blind spots or excessive glare from direct sunlight.

7. Regularly Maintain and Check Your System – Routine maintenance ensures that cameras function correctly when needed. Regularly clean lenses, check for firmware updates, and test video storage solutions to ensure that recordings are accessible when required.

Risky Spots to Avoid

• Inside bedrooms and bathrooms: Privacy concerns make these areas off-limits for surveillance.
• Neighbor’s property: Filming beyond your property line can lead to legal consequences.
• Behind obstacles: Avoid placing cameras behind trees, walls, or other obstructions that may limit their view.
• Too close to bright lights: Excessive light exposure can wash out footage and reduce clarity.

By following these best practices, you can optimize your home security system while respecting privacy laws and ensuring effective surveillance. A well-placed and secure camera system serves as a strong deterrent against potential intruders and enhances overall home safety.

During Louisiana’s 2024 Third Extraordinary Session, significant reforms were enacted to the state’s sales and use tax system, effective January 1, 2025. These changes aim to simplify the tax code, broaden the tax base, and adjust tax rates to align with the state’s fiscal objectives.

Increase in State Sales Tax Rate

The state sales and use tax rate increased from 4.45% to 5%, effective January 1, 2025, and is set to remain at this rate until December 31, 2029. Beginning January 1, 2030, the rate will decrease to 4.75%. This adjustment positions Louisiana among the states with the highest combined state and local sales tax rates in the nation.

Expansion of Taxable Goods and Services

The tax base was broadened to include digital products and prewritten computer software access services. This means that sales and use tax now applies to digital goods and services, aligning Louisiana with other states that tax digital transactions.

Modification of Exemptions and Exclusions

Over 200 sales tax exclusions and exemptions were either repealed or retained to streamline the tax code:

• Repealed Exemptions: Certain exemptions, such as those for pollution control devices and systems, and sales of cellular telephones and electronic accessories (e.g., free phones), were repealed.
• Retained Exemptions: Exemptions for sales of raw agricultural commodities and purchases by nonprofit entities that sell donated goods (e.g., Goodwill, Salvation Army) were retained.

Vendor Compensation Adjustments

The compensation for vendors collecting and remitting state sales tax was reduced from $1,500 to $750 per month. Additionally, the vendor’s compensation for local taxes was eliminated.

Local Sales Tax Reporting Changes

Local sales tax collectors are now required to modify their tax returns to include separate line items for sales of prescription drugs and for the sale of manufacturing machinery and equipment. This change aims to enhance transparency and accuracy in tax reporting.

Implications for Businesses and Consumers

Businesses dealing in digital products must now account for sales tax in their pricing and invoicing. The reduction in vendor compensation may impact retailers’ administrative processes. Consumers may experience a slight increase in prices due to the higher sales tax rate and the expanded tax base.

These reforms reflect Louisiana’s efforts to modernize its tax system, broaden the tax base, and adjust rates to meet fiscal needs while aiming for a more straightforward and equitable tax structure.

Clarifications on Taxation of Prewritten Software Access Services in the Security Alarm Industry

The recent tax reforms have raised questions within the security alarm industry, particularly regarding the taxation of prewritten software access services. Here’s a breakdown of how these services are taxed at different stages:

1. Provider to Central Station: When a provider charges a central station for access to prewritten software (e.g., software facilitating alarm monitoring), this transaction is subject to sales tax. The provider is responsible for collecting and remitting this tax.
2. Central Station to Installer: If the central station passes the software access charge to the installer without markup, the central station should not charge sales tax again, provided that the installer furnishes a resale certificate. This certificate indicates that the installer is purchasing the service for resale to the end user.
3. Installer to End User: The installer must charge sales tax to the end user on the software access service. The installer is responsible for collecting and remitting this tax to the Louisiana Department of Revenue.

It’s crucial for each party in the supply chain to maintain proper documentation, such as resale certificates, to ensure compliance and avoid double taxation. For detailed guidance, refer to the Louisiana Department of Revenue’s FAQs on taxable services.

These clarifications aim to assist businesses in navigating the complexities of the new tax regulations. The LLSSA does not claim to be the voice of authority in this matter and all questions should be referred to your Accountant and the Louisiana Department of Revenue at Sales.Inquiries@LA.GOV 855-307-3893.

As temperatures drop, the incidence of carbon monoxide (CO) alarms rises due to increased use of heating appliances. It’s crucial to understand the triggers of these alarms to ensure effective responses. Common causes include blocked vents from snow or ice, animals obstructing flues, or misuse of equipment like running vehicles in garages or generators near living spaces. Modern CO detectors are generally reliable, and false alarms are rare.​

In managing CO alarms, it’s essential to verify that the alarm indicates an actual CO event rather than a device malfunction. Upon receiving a CO alarm, immediate action involves instructing occupants to evacuate and contacting emergency services without delay. This protocol is vital because CO exposure impairs cognitive functions, hindering individuals’ ability to make sound decisions. Consistent application of these procedures can prevent tragedies associated with CO poisoning.​

Regular maintenance of heating systems and proper installation of CO detectors are proactive measures to minimize risks. Ensuring vents and flues are clear and educating occupants about the dangers of CO can further enhance safety during the winter months.​