Overview of PSARA Annual Compliance
A registered Private Service Agency must comply with the Agencies (Regulation) Act, 2005, the Private Security Agencies Central Model Rules, 2020 and other business laws. Under these rules and laws, there are numerous compliance requirements that a PSARA Business needs to obey to manage the functioning of the business, its services, its employees, etc. The primary function of PSARA Annual Compliance is to ensure that the agency is duly performing its responsibilities.
After a Private Security Service Agency obtains a PSARA license, it must comply with its mandatory compliance requirements. Such compliance needs may be monthly, quarterly, half-yearly or annual. It is imperative to seek professional help to deal with a private security agency’s different PSARA Annual Compliance requirement.
Importance of PSARA Annual Compliance
Dealing with the numerous PSARA Annual Compliance requirements is vital for a private security service agency to run a compliant business. It improves the brand's reputation and boosts the growth and development of the business.
Non-Adherence to standards and compliance requirements may lead to severe consequences like reduced business credibility and losses. The business may face expansion and growth problems and legal consequences such as lawsuits and heavy penalties.
Timely filing of PSARA annual compliance helps the Private security agencies to stay updated with the time-to-time changes in government and industry standards. The primary importance of complying with various PSARA annual returns and requirements includes the following:
- Increases Market Reputation: A private security agency that stays compliant with all the necessary compliance requirements has more brand value than its counterpart. Moreover, adhering to the needed compliance norms creates goodwill among the creditors, investors and banks and helps the company to get funds quickly.
- Compliant functioning of the Agency: Filing all the necessary returns and obtaining all the requisite one-time registrations helps private security agencies maintain the needed standards and safety of their employees. These standards may relate to their salary, safety, harassment, employee welfare, rules of discrimination, etc. It improves current business operations and sets standards for future targets.
- Safeguard from Legal Disputes: Ensuring compliance with necessary statutory obligations saves the PSAs from potential legal disputes and penalties. It is crucial to obtain compliance services for PSARA business from experienced professionals to avoid legal penalties or lawsuits and keep the business updated with industry standards and PSARA laws and rules.
- Financial Planning: PSAs must keep up with specific standards in terms of taxation and accounting. If the business fails to meet these standards, it may lead to huge losses and inaccurate financial management. Timely PSARA annual compliance helps the business to keep its financial records up-to-date by ensuring timely auditing, assurance, and maintenance of necessary records.
- Transparency and Accountability: A private security agency that adheres to statutory compliance requirements can also create transparency and accountability in its operations. Each department knows about its statutory liability, and the business can operate more streamlined and uninterruptedly.
One-Time Registrations for a PSARA Licensed Business
A PSARA business must have specific mandatory one-time registrations once it has successfully obtained its PSARA License Registration. These one-time registrations include:
- GST Registration
- ESI Registration
- EPF Registration
- NSDC Registration
- MSME Registration
PSARA Annual Compliance
PSARA Annual Compliance with MCA
After obtaining the PSARA license, the business must file annual compliance requirements with the MCA. Such compliance liabilities apply to the Agency if it is incorporated as a Company under the Companies Act. The MCA-based PSARA annual compliance requirements include:
- Appointment of Statutory Auditor
- Board Meetings and maintaining minutes of the meetings
- Filing of Annual RoC Returns
- Maintenance of Statutory Registers and Books of Accounts
- Annual General Meetings and maintaining minutes of the meetings
- Directors' Report
- DIR-3 KYC
- Financial Statements and reports
Additional Compliance Requirements of a Private Security Agency
In addition to the MCA annual compliance, the PSARA Act and Central Model Rules also lay down specific compliance requirements for a private security agency having PSARA registration. These compliance requirements include:
- As per Rule 4(4), the PSA must submit the details of the name, parentage, date of birth, permanent address, and address for correspondence and the principal profession of each person forming the Agency within fifteen days of receipt of the licence to the Controlling Authority.
- As per Rule 4(5), the PSA must inform the Controlling Authority about any change in the address of persons who has formed the agency or any change in management within thirty days of such change.
- As per Rule 4(6), the PSA must inform the controlling authority about any criminal charges framed against the person forming the PSA or the supervisor or security guards. A copy of such document must also be submitted to the officer in charge of the police station where the person who has been charged resides.
- As per Rule 4(7), the PSA must regularly comply with the requirements of physical standards for the guards and their training as per the rules after obtaining the PSARA license. It serves as the condition on which the license is granted to the PSA.
- As per Rule 4(9) and (10), the PSA must commence the business and its activities within six months of obtaining the PSARA license, where the commencement of business must also include the establishment of office and engagement of supervisors, as specified in Section 9(3) of PSARA, 2005 along with Rule 10.
- As per Rule 8(7), the PSA must regularly submit a list of successful trainees to the Controlling Authority.
- As per Rule 9(2), the PSA must provide training and skills to its guards and supervisors as prescribed. If a PSA has started before the commencement of the Act, the training must be provided within one year of commencement of the Act.
- As per Section 9(3) and Rule 10, the PSA must employ the prescribed number of supervisors within Sixty days of the license issue.
- The PSA must regularly submit the guards' and supervisors' training details before their appointment.
Maintenance of Registers and Records
As per Section 15 of the PSARA Act, every private security agency must maintain a set of registers or records. The register must contain the following information:
- The name and address of the person managing the Private Security Agency.
- The names, addresses, salaries and photographs of the private security guards and supervisors working for the private security agency.
- The name and address of customers of the PSA.
- Any other particulars required.
The Controlling Authority can ask for any such registers from Private Security Guard, Supervisor or Private Security Agency, as and when required. Further, Rule 12 of the Private Security Agencies Central Model Rules, 2020, states that the agency must maintain such registers electronically as per the format under Form X.
Training Compliance Requirements of a Private Security Agency
The Controlling Authority lays down the syllabus for various training modules to train the appointed security guards. Every private security agency must comply with these training requirements per the National Skill Qualification Framework. The PSARA Act lays down the following training modules for entry-level training of the guards:
- Minimum 100 hours of classroom instructions
- 60 hours of field training
- The training schedule is required to be completed within 20 working days by a PSA
The Act also lays down the following training modules for veterans and former police personnel:
- 40 hours of classroom training
- 16 hours of field training
- The training schedule is required to be completed within seven working days by a PSA.
The subjects to be covered during the training are as follows:
- Training on public conduct and the correct way of wearing the uniform
- Physical fitness training
- Training on physical security, security of assets, building/apartment, personnel security and household security
- Training in fire fighting
- Training on crowd control
- Training on examining ID proofs such as ID cards, passports and smart cards
- Training on the bare reading of alphabets and Arabic numerals as generally mentioned in the identification documents, licenses, passports etc.
- Training on the identification of improvised explosive devices
- First aid training
- Training on disaster management and crisis response
- Training on defensive driving
- Training on handling and operating non-prohibited weapons and firearms
- Training on rudimentary knowledge on IPC, right to private defence, FIR, Arms act, and Explosives Act.
- Training on badges of rank in military and police force
- Training on the identification of different types of arms which are in use in public and police
- Training on the use of security equipment and device
- Training of supervisors on leadership and management
Procedure for PSARA Annual Compliance
Step 1: Assessment of Compliance Requirements of the Private Security Agency
Once the customer fills out the form, Corpbiz begins assessing the business model and the business's monthly/quarterly/half-yearly/annual compliance liabilities. Based on these compliance liabilities related to the MCA, taxation and PSARA Authority, our team customises the compliance package for the client.
Step 2- Preparation of Necessary Registers and Reports
After assessing the client's compliance needs, all the necessary registers, records and reports are maintained in compliance with the MCA requirements, PSARA Act and Rules.
Step 3- Filing of Necessary Forms and Applications
Our experienced professionals then prepare the necessary forms and applications to be filed with the appropriate statutory authority. After the requisite forms are prepared, the team submits them to the concerned authority per the applicable due dates.
Frequently Asked Questions
Corpbiz has a team of seasoned PSARA experts who are well-versed in the knowledge of all MCA, tax, labour law and PSARA compliance-related services. We ensure that we provide you with all the required solutions for your compliance management based on the specific requirements of your business.
Getting assistance to manage your PSARA annual compliance requirements can help you fulfil your agency's legal, labour-related and tax-related obligations without the fear of Authority scrutiny or penalties.
Adhering to the applicable PSARA compliance requirements can help your business in the following ways:
- It provides transparency to the business.
- It ensures employees' safety and customer care.
- It protects your business from penalties of non-compliance.
There are different kinds of MCA compliance, tax compliance, labour compliance and PSARA compliance applicable to a private security agency.
Every private limited company, partnership, LLP, proprietorship and one-person company can obtain a PSARA license registration.
PSARA license is valid for five years unless it is not cancelled under Section 13 of PSARA, 2005.