|
 What's
in a Name?
How about one year in jail and a $4,000 fine.
By Carlos A. Peniche
The vast majority of security contractors are small businesses.
Many of them are sole proprietors or “informal partnerships” (two or more owners who have not formed an entity such as a corporation, LLC or partnership and have not registered with the Secretary of State of Texas). Many others have formally formed an entity but do business under a different name. In my experience, the vast majority of small business owners are unaware that doing business under an assumed name or “dba,” is a class A misdemeanor, which in the case of Texas security is devastating since a pending class A misdemeanor charge results in a summary suspension under the Private Security Act. For those readers in other states, it is possible the same sort of laws exist in your state.
The Assumed Business or Professional Name Act, §71.01 et. seq. Texas Business & Commerce Code (B&CC) requires entities (corporations, LLC’s, partnerships, etc…) and individuals to file an assumed name certificate in various locations depending on the circumstances. This article focuses on individuals and “mom and pop” security contractors as a warning to all of you who are in business without a formal entity designation and have put out a sign, shingle or placard with your business name on it without filing an assumed name certificate.
An intentional violation of the statute is a class A misdemeanor punishable for up to one year confinement, a $4,000 fine or both.
Individuals are required to file the certificate with the county clerk in each county in which the individual has or will maintain a business or professional premises or, if the person does not and will not maintain a business premises in any county, then the individual must file the certificate in each county where business is conducted or professional services are rendered.
An individual is doing business under an assumed name when the name of the business does not include the individual’s surname. So if Jose Flores has signs up and a placard on his vehicles which say “Flores Security,” that is not an assumed name. He is exempt from the act. However, if Sam Smith has signs and business cards referring to “Texas Security Enforcement,” then Smith is doing business under an assumed name and needs to file an assumed name certificate in the county where his office is located.
If you are operating your security business out of your home and do not have a “business location” where clients can come, you may need to file an assumed name certificate in every county where you do business. Suppose that Smith has an apartment or home in Dallas and none of his clients seek him out there. He has ads in local weekly newspapers and in some regional phone books and has a website for “Texas Security Enforcement.” The newspapers and phone books reach not only Dallas County but several of the surrounding counties in the metroplex area. Of course, the website reaches the entire world. Once Smith provides security in any county as “Texas Security Enforcement” he must file an assumed name certificate in that county because he does not have a fixed business premises. He would be well advised to file in Dallas County as soon as he gets his ads out and/or the website up, as the act requires the assumed name certificate to be filed in each county where business is “to be” conducted and the circumstances noted above make it appear he is likely to be doing business in Dallas County.
And if you are literally a “mom and pop” business, where husband and wife are running the business, guess what? Even if you don’t have any formal written agreement, your “mom and pop” business is probably a general partnership and if your business does not contain your surname in it (here I would assume husband and wife share the same last name, but if not then both surnames need to be in the business name), then your business needs to have an assumed name certificate on file as well. So if Smith and his wife Debbie Smith run “Texas Security Enforcement,” then they need to have an assumed name certificate on file. If they run the business out of their home and customers don’t come to the home to transact business there, then they probably should file in every county they do business in.
Also, if your business name does have your surname in it but suggests the existence of additional owners with words such as “& Company,” “& Sons,” “& Associates,” etc…, then that business must also file an assumed name certificate in the appropriate county or counties.
Finally, an entity which does business under an assumed name must file its assumed name in the county of its registered office and with the Secretary of State of Texas. So if Smith has a company named “Smith Investments, Inc.” but does business as “Texas Security Enforcement,” then that business needs to file assumed name certificates with the Secretary of State and in its home county.
Carlos Peniche is a 28-year double board certified (Civil Trial Law and Personal Injury Trial Law, Texas Board of Legal Specialization) litigation attorney who has represented security guard contractors, private investigators, alarm companies and other security professionals in both litigation and transactional matters. He is the founder of Peniche & Rojas, PLLC (Houston, Texas) Phone: 713-522-7444, ext.302; email:
carlos@thehispaniclawfirm.com.
|
