Is PSARA License A Good Investment For Small Security Agencies?

Setting up a private security agency requires strict adherence to regulatory norms under the PSARA Act 2005. One of the norms mandates all private security agencies to obtain a PSARA license. Within a state, a controlling agency is designated to oversee the registration and functioning of such agencies. Often questions arise over whether getting a PSARA licence is beneficial for small security agencies, owing to their limited scale of operations.

Let’s delve deeper and understand with us the benefits of a PSARA license for small security agencies or big corporations venturing into this industry alike.

What is PSARA license under PSARA Act 2005?

A Private Security Agencies Regulation Act (PSARA) license is a legal obligation for those individuals or corporations who wish to operate a security agency in India. The licensing norms are enacted under the PSARA Act 2005, which came into force in March 2006.

PSARA Certificate Consultants act as key liaisons who assist private security agencies throughout the registration process for a PSARA license and guide them on how to comply with regulations that vary from state to state.
Once a private security agency receives its license, it must commence its operation within 6 months of the grant of the license. A PSARA license remains valid for five years and requires renewal from time to time. Renewal application must be submitted at least 45 days before the date of license expiry.

The PSARA Act 2005 mandates agencies to issue a photo identity card to their security guards. The guards shall wear a uniform whose cost would be the employer’s responsibility. These personnel must undergo training which includes theoretical instruction of a minimum of 100 hours and practical training of a minimum of 60 hours.

The training will encompass physical fitness training, crowd control, teachings on conduct in public, first-aid assistance, crisis response, firefighting, etc. The guards must be well-versed in English language and should be able to read and understand Roman numerals. He/she must know defensive driving, which is compulsory for armoured vehicle driver.

Key Advantages of Obtaining a PSARA License in India

Agencies who wish to apply for a PSARA license can avail of the services of PSARA Certificate Consultants to expedite and streamline the entire registration process. A PSARA license brings numerous benefits to security agencies, such as:

• Industry Recognition: The license is an indicator that security agencies operating within the jurisdiction are legitimate, trustworthy, and credible. It helps these agencies attract more client, and enhance their compliance which eliminates risk of penalties, and ensures better quality of services in its operations.
• Employee Welfare: A PSARA license operates under a legal framework. The legal aspect of running a security agency instills confidence among its employees. For instance, the benefits offered through EPFO and ESIC registration, which are mandatory for these agencies, increase the morale and motivation of security guards connected with these businesses.
• Access to Government Contracts: The license enables even the small-scale security agency to bid for government contracts. These awarding of contract to these agencies not only improve their reputation but also provide more business opportunities in the industry.
• Increase in Trust and Credibility: A PSARA License helps in Gaining a Competitive Edge in Security. In addition, the authorization is proof that the agency is operating within legal boundaries and will be exposed to strict penalties and fines if they fail to comply. This enhances trust and confidence among users of its services and helps the agency expand its business to greater heights.

Step-by-Step Guide on How to Get a PSARA License

PSARA Certificate Consultants will guide you through the intricate regulatory procedure of obtaining a PSARA license. The process includes the following steps:

• Register your Business: Applicants who are planning to obtain a PSARA license first must get their venture registered under the Companies Act 2013. The company can be established in any type, limited liability partnership, private limited company, one-person company, proprietorship, partnership firm, etc. This will ensure that the private security agency is created lawfully and provide legal recognition.
• Appoint Key Personnel: Upon successful registration of a company, the next step is to appoint key managerial persons such as directors and promoters. Directors or the principal officer must fulfill specific criteria as prescribed under the law. For instance, he/she must have attained a minimum of 18 years of age, must be an Indian citizen, not have any past criminal records, or been a convict in a case, etc.
• Experience: Prior experience in operating a private security agency is not mandatory but a rewarding advantage. Appointing people in the agency with decent experience in the security industry will help the company learn the nuances of operating a security agency as compared to other businesses. It will also add credibility to the application.
• Office Infrastructure: Under the Private Security Agencies Regulation Act 2005, a private security agency’s office must have a well-established office space, areas to train security personnel, and effective communication channels to disseminate information to employees and operate effectively, among others.
• Gather Necessary Documents: Once the applicant fulfils all the above mentioned prerequisites, then arise the need to compile and gather key documents. It includes business registration proof, details of directors and promoters, a copy of address proof, an NOC (No Objection Certificate) obtained from the local police department, and detailed information about the training programs for security guards.
• Submit Application: Along with the documents, the applicant also has to attest the application form and submit it to the relevant state security board. In India, each state has its own official representative authority that oversees the entire PSARA registration regulatory process. These authorities verify the documents furnished by the agency, along with the application form and police clearance certificate.
• Pay the Requested Fees: To obtain a PSARA License, it is essential to pay the PSARA license fee. In addition, renewal of the license also attracts substantial monetary compensation from the applicant. Licensing fees depend on the agency’s area of operation. For instance, if an agency is obtaining a license to operate only in a single state, it must pay Rs. 5,000. Agencies willing to operate in two to five districts are required to pay Rs. 10,000 and for the entire state, it is Rs. 25, 000.
• Await Approval: Once the applicant submits all the documents, application form, and necessary fees, authorities will review all the information, conduct background checks, and upon careful examination either grant the license or reject the application.

When does the PSARA Application Get Rejected?

Building Trust for Your Security Agency with PSARA License is essential to legally operate a private security agency and tap the vast business opportunities available in the industry.

As per the Private Security Agencies (Regulation) Act 2005, no person can commence or operate a private security agency without prior approval of the government. It is mandatory to get a PSARA licence for which the applicant must submit an application to the controlling authority.

The application must contain all the necessary information, essential documents, and a certificate verifying the background. The authority can reject an application and not consider grant of license in the following cases:

• Inaccurate or Incomplete Registration: If a business fails to adhere to the terms and conditions set forward in the PSARA Act 2005 and amended acts of the respective state, he/she will not be granted the license. On the grounds of lack of training facilities, unfit business premises, submission of inaccurate or wrong information, etc., empower the controlling authority to reject an application.
• Insufficient Documentation: If the applicant fails to furnish the necessary documents such as a verification certificate from the local police station, identity proof, valid address proof, and financial stability proof, they will not be eligible to obtain a PSARA license.
• Criminal Background: The authorities can reject an application if the applicant is found convicted by a competent court and received imprisonment for a minimum of 2 years.
• Dismissed for Misconduct: The authorities do not consider individuals who have been removed or dismissed from government service because of moral turpitude or misconduct.
• Security Concerns: If the applicant is found to be linked with any association or organization that is banned due to their activities that pose a threat to the security of the nation.
• Not Registered in India: A company, association, or firm will not be granted a certificate if it is not registered in India under the specified act. It also disregards those applicants whose company’s majority shareholder is not an Indian citizen.

Once the concerned authority receives the application, it will conduct inquiries that it considers necessary. Upon careful examination, it either grants the license or rejects the application. This is done within 60 days from the date of receipt of the application form. The authority cannot reject an application unless it gives a reasonable opportunity to the applicant to present its clarification/ statement.

Connect with PSARA Certificate Consultants to understand and comply with PSARA regulations set forth under the PSARA Act 2005.

What are the Essential Documents for PSARA License?

To apply for a PSARA license, an applicant must provide the following certificates and documents:

• Company registration documents such as AOA (Articles of Association), MOA (Memorandum of Association), certificate of incorporation, or any other requested registration papers.
• PAN of all people associated with the business and GSTIN
• Address proof of the office which may include an electricity bill, rental agreement, or any utility bill.
• Passport-size photograph of directors, promoters, or proprietors.
• Identity proof of all associated individuals, which may include Aadhar card, Driving license, Voter ID card, etc.
• An affidavit signifying compliance with PSARA regulations must be attested by an authorized official or notary.
• Copy of ITR (Income Tax Return) of directors (to assess financial stability of business)
• The security guard’s training certificate will demonstrate that the personnel have completed their training within the timeframe.
• Police verification certificates are mandatory in some states.

Along with these, the applicant has to undertake the following activities.

• ESI Registration: Every private security agency is required to get registered under the ESI Act 1948.
• GST Registration: Private security agencies are mandated to obtain a GSTIN number and GST registration to operate their security service business in India.
• ISO Certification: An agency doesn’t need to obtain ISO certification like ISO 9001 or ISO 18788. However, it demonstrates the credibility and quality of its security services.
• PF Registration: To obtain a PSARA license, the agency must register with EPFO (Employee Provident Fund Organization) to provide PF benefits to its employees.

An applicant must Understand the Costs of Maintaining a PSARA License to optimally operate its security business, ensure compliance with norms that will arise from time to time, and gain a positive reputation in the market.

Final Thoughts

PSARA Certificate Consultants are essential intermediaries who ensure that private security agencies operate within legal boundaries and in a transparent manner. The PSARA Act 2005 legally binds the agencies providing security services to apply for a PSARA license before commencing its operation, no matter on which scale and state they operate.

Applying and complying with PSARA norms is a complex procedure. It requires the applicant to fulfill the regulatory criteria, set up adequate infrastructure and training facilities, submit accurate and complete information, and conduct background checks before appointing any personnel. Connect with PSARA Consultants of Legal Raasta to meet all the legal requirements, smoothly register the business, and speed up the entire application process.