Licensing Requirements for Private Security Agencies

The Private Security Agency Regulation Act License, or PSARA license, is presumed to be required in order to operate a private security company. Any resident of India can submit an application for a PSARA License. In order to get a license under the PSARA Act, a private security service needs to fulfil the necessary requirements. The PSARA Act is the regulatory framework that governs the oversight of private security firms doing business in India. Before commencing to provide their services, all private security companies must get this PSARA License. Any security agency must abide by the obligation to register with PSARA. PSARA monitors and regulates the security agency’s operations.

What is a Private Security Agency (PSARA License)?

These days, everyone’s first priority is security. As a result, hiring personal security guards from private security agencies is becoming more and more common in many industries, including banking, finance, and IT. However, the government must also take some preventive action to ensure national security. The government developed PSARA Licensing as a result. The Private Security Agencies Regulation Act (PSARA) is a law passed by the Indian government that establishes guidelines for private security firms. Furthermore, the PSARA maintains vigilance about the private security agencies’ registration. The number of commercial establishments has increased recently, which has led to a rise in the need for security.

The actions and conduct of any business that provides and trains security guards are governed by the Private Security Agencies Act of 2005. According to the act, any agency that engages in these activities without getting the necessary license will not be permitted to function in accordance with the act’s provisions.

As a result, the applicant must apply in the state in which they now reside. The license would come from the state agency. One state’s application requirements could differ from another state. For this type of license, there is no central system.

This license is not a one-time deal. The government has the authority to suspend a person’s license even during the renewal process if it determines that they have violated any PSARA Act provisions. According to Section 4 of the Act, an Agency or individual cannot open for business without a PSARA License. Consequently, possessing a PSARA license is crucial.

Licensing Requirements for Private Security Agencies (PSARA License)

Licensing Requirements for Companies

The licensing requirements for private security agencies are as follows:

Entities and Individuals:

The following person can submit an application for PSARA:

Any organization, including individuals and businesses, may submit an application for a PSARA License. The following applications are included in the indicative list: Private Limited Company:

• Individual proprietorship firms;
• Partnership firms;
• Limited liability partnerships (LLPs)

Name and Purpose of Business:

The words “Security Services” or similar terms that express the applicant’s purpose should appear in the entity’s name. The MOA for a Company must have a particular section about the provision of security services.

MOU with Training Institute:

The candidate must affix the signature to an MOU with a security training facility approved by the state regulatory body. The security guards who work for the organization will receive training from this institute.

No FDI:

India does not allow foreign direct investment. Some industries, nonetheless, are not allowed to accept any kind of foreign direct investment. A Private Security Agency (Regulation) Act, 2005, section 6(2), prohibits the granting of such a license to non-Indian residents. This type of license would not be granted, even if the directors are foreign nationals.

National Interest:

A person with ties to an association or organization that is outlawed in India is not eligible to receive a PSARA license. Preserving Public Order, safeguarding National Security, and stopping any actions that may jeopardize it are the objectives.

Licensing Requirement for Owner/Director

1. Education: The owner, director, partner, etc., must have completed the eighth standard or above.
2. Financial Condition: The governing authority may request the applicant’s income tax returns, and the applicant must be in good financial standing.
3. No Bind over ongoing cases: The security agency’s top brass has to be bound for cases that are still ongoing in court.
4. Nationality and Age: Indian, over the age of eighteen.
5. Unique Skills: The agency’s owners and senior officials have received special security training.
6. Clean Backgrounds: The Controlling Authority and the police department must vouch for the antecedents of the agency’s top executives.

Further requirements, other than the aforementioned, must also be met:

• Neither the individual nor the business may be found guilty of any crime relating to the establishment, advancement, or administration of a business (including fraud or other wrongdoing by him about the business), including an unresolved insolvency;
• The individual or business cannot be found guilty by a competent court of a crime for which a minimum two-year jail sentence is stipulated;
• The individual or business is not allowed to maintain connections with any group or association that is prohibited by law due to its actions endangering public order or national security.
• A person cannot be fired or removed from government employment due to moral deterioration or wrongdoing.

Documents Required for Licensing Requirements for Private Security Agencies

Private security agencies require certain documentation to get a PSARA license in India, which might differ based on the state or union territory in which it operates. Nonetheless, the following typical papers can be needed:

Application Form:

In order to receive a PSARA license, the private security company must submit an application that is properly completed. The application form can be accessed on the website of the relevant state or union territory authority.

Financial Records:

To demonstrate its capital needs and financial health, the private security company may be required to provide financial records, such as bank statements, audited financial statements, and other financial records.

Address Proof:

In order to prove its place of business, the private security company must produce address-proof documentation, such as a lease deed, rental agreement, or utility bills.

Identity Proof:

Documents proving identity, such as an Aadhar card, PAN card, passport, or voter ID card, may be required to be submitted by the private security company and its important employees, including directors, partners, or proprietors.

Passport-sized Photos:

In accordance with the requirements listed in the application form, the private security company and its key employees may be required to submit passport-sized photos.

Experience Certificate:

To demonstrate its background in the security industry, the private security company may be required to provide documentation or an experience certificate. This might contain information on prior security agreements or initiatives.

Training Certificates:

To demonstrate that its security staff received PSARA-compliant training, the private security company may be required to present training certificates or other supporting documentation. This might contain information on the security personnel’s certification, length of training, and training regimen.

Memorandum and Articles of Association:

As evidence of registration, the private security business must provide the Memorandum and Articles of Association (MOA and AOA) for companies or the Partnership Deed for partnerships.

Additional documentation as required:

Depending on the state or union territory’s unique needs, the private security service may be required to produce any other documents as asked by the governing bodies, such as integrity certificates, Clearance from local police, or additional pertinent paperwork.

Steps of Obtaining a PSARA License

Private Security Agencies Regulation Act License requires the following steps to be fulfilled in order to obtain a PSARA license:

• Document Preparation:

Gather and organize all relevant paperwork for obtaining a PSARA license. This covers registrations as well as information about the agency’s promoters and directors. To avoid inconsistencies, keep documentation clear and legible. After completing the e-signing prerequisites, the application process can be started through the online portal.

• Memorandum of Understanding with Training Institutes:

Sign a Memorandum of Understanding with an appropriate training institute listed on the PSARA website. This collaboration is critical for training potential security officers. Agencies that work with training institutes frequently recruit high-quality staff. Ex-servicemen may be eligible for exemptions and waivers from training requirements.

• Application Filing:

Submit the application (Form-I) to the state body in charge of PSARA License issuance. Include Form II for verification of the agency’s antecedents, as well as an Affidavit in Form III as needed.

• Verification by police:

After submitting Form-I, police verification is performed. Directors are subject to police verification in circumstances when the agency is a partnership or a corporation.

• PSARA License is Grant:

The state authorities will thoroughly review the application and conduct any necessary verification. After satisfactory verification, the PSARA License in Form-IV may be given. However, there is a chance that the application will be refused.

Advantages of PSARA License

• Training Company Empowerment: 

One of the key benefits of a PSARA license is the ability to register under particular categories, which are often separated into one district, three to five districts, or a set of districts. The five-year license allows the training and empowerment company to provide private security services to other businesses or individuals in need. It places the licensed private security organization in a position similar to that of a trade union, allowing it to exercise rights and safeguard interests that would otherwise be inaccessible without the license.

• Legal Compliance:

Private security firms in India are obliged by law to obtain a PSARA license. Operating without a current license may result in penalties and business closure.

• Trust and Reputation:

Having a PSARA license increases a private security company’s credibility and dependability. Clients are more likely to hire an agency that has a valid license since they know they have met all legal requirements.

• Quality Control:

The PSARA license indicates that the business has met stringent operational and quality standards, including conducting background checks on all of its workers. The quality guarantee boosts the professionalism of the private security sector.

• Customers benefit:

Customers benefit from the PSARA license since it provides a system for managing complaints and disputes with licensed enterprises. They can file an inquiry with the regulatory authorities if there are any difficulties.

• Enhanced Security:

To help guarantee that security services are supplied by persons with clean records and the requisite qualifications, the licensing procedure for agency workers typically includes clearances for security and background checks.

• Deterrent to criminal Activities:

Because organizations operating without a license risk legal repercussions, the PSARA license serves as a deterrent to criminal behaviour in the private security sector.

• Commencement of Recruiting Activities:

Another advantage of a PSARA license is that a Private Security Agency that has submitted an application for and received a PSARA license must wait six months before beginning its activities, which include recruiting, training, and placement. This post-recruitment process entails training and officially certifying persons as competent security staff. Only after the hiring agency is pleased with the recruit’s character will they advance with training as well as placement, sending the individual to work on a contractual basis at a specified organization or required workplace.

 Renewal of Private Security Agencies (PSARA License)

A PSARA license can be renewed by submitting an application to the regulating authority not less than 45 days before the permit’s expiration date, together with the required documentation and price. Furthermore, the regulating authority will issue an order for license renewal within 30 days of receiving the application.

Cancellation of PSARA License

Certain justifications have been provided for in the PSARA Act of 2005, with particular reference to Section 13. The PSARA License is cancelled on these grounds, which are as follows:

1. The aforementioned license was obtained through misrepresentation or the suppression of material information.
2. The license was secured through the use of forged documents.
3. If any of the requirements of the PSARA Act, 2005 are violated.
4. The license holder abused the information while the agency was doing its job of enhancing security.
5. If the license holder has ever attempted to impersonate a government official.
6. The license holder has failed to extend the services that were agreed upon.
7. The license holder has resorted to behaviour that is directly contrary to the court’s order.
8. There is a chance that the license holder will constitute a threat to national security.

Other License Required for Private Security Agencies

Private Security Agencies must obtain various licenses and certificates before they may legally operate. The following licenses and certifications are required for a Private Security Agency in India:

• ISO Certification

Because private security services must be reliable and efficient, it is vital for the Private Security Agency in India to acquire this certification known as ISO Certification. This will reassure clients about the agency’s dependability and efficiency. ISO has already developed a distinct security operation management standard that will be applicable to Private Security Agencies. The following will be known as ISO 18788:2015.

• PF Registration

PF stands for Provident Fund. PF Registration is required to receive the benefits of the Provident Fund Scheme. Employees cannot benefit from the Provident Fund Scheme, which is governed by the Miscellaneous Provisions Act of 1952 unless they register.

• Registration for GST

All private security agencies in India must be GST registered and receive a GSTIN in order to conduct their company-providing security services. GST stands for Goods and Services Tax, and providing security is also a taxed service. As a result, GST registration is required for Private Security Agencies in India.

• Registration for ESI

To provide quality medical care to personnel of Private Security Agencies in India, one must have ESI Registration under the ESI Act of 1948. Employees’ State Insurance Corporation (ESIC) is a corporation established under the ESI Act of 1948 to oversee the ESI Scheme.

PSARA License Compliances

Private security agencies are expected to comply with the PSARA requirements in the following ways:

• All private security companies ought to recruit supervisors to oversee the work of the organization’s personnel.
• These agencies are required to train the security personnel assigned to their company.
• PSAs should prioritize ex-military individuals with three years of experience.
• The PSAs must adhere to all of the PSARA’s requirements, qualifications, and disqualifications.
• According to PSARA, security personnel must adhere to the uniform policy.

Disqualification for Non-Compliance Licensing Requirements for Private Security Agencies

Your PSARA (Private Security Agencies Regulation Act) license application may be refused for a number of reasons. Among these conditions are:

• Criminal history: If you have a criminal history or have any outstanding criminal charges against you, you may be disqualified. Before granting a PSARA license, the licensing body normally undertakes a comprehensive background check.
• Violation of prior license terms: If you previously obtained a PSARA license and violated any of its rules or regulations, your application may be denied.
• Failure to pay fees: Failure to pay the requisite fees linked with the license application can also result in disqualification.
• Failure to fulfil the eligibility requirements: If you do not meet the eligibility criteria established by the licensing body, your application may be rejected. This might include reasons such as not having the necessary security sector experience or not meeting the minimal educational credentials.
• Giving false or wrong information: Giving false or incorrect information in your application may result in disqualification. This includes lying about your experience, school credentials, or any criminal history.
• Failure to submit needed papers: You may be disqualified if you fail to submit any of the required documents with your application. Evidence of address, identification evidence, educational credentials, character certificates, and other supporting papers are often included.

Conclusion

In conclusion, acquiring a Private Security Agencies Regulation Act license necessitates the production and submission of relevant PSARA license paperwork. These include the certificate of incorporation, a signed memorandum of understanding, proof of office address, registrations for Employees State Insurance and Provident Fund, staff identity cards, an affidavit in accordance with the PSARA Act, details of the agency’s logo and uniform pattern, a copy of the Income Tax Return, and character certificates for all employees.

Frequently Asked Questions