Do want to start a private security agency business in India? Well, you must obtain a PSARA License to begin your operations legally. PSARA or the Private Security Agencies Regulation Act 2005 is a central law that regulates all aspects related to the private security agency business in India. The act mandates all private security agencies to obtain a license from the respective state controlling authority before commencing their business. But, do not worry about the tiresome process of acquiring the license, as there are many agencies in India that provide online PSARA license consultancy services. In this blog post, we will delve deeper into the essentials of acquiring a PSARA license in India.
A. Overview of the need for private security agencies in India
Private security agencies in India have become a necessity in recent years due to the increasing demand for security services in various industries, such as hospitality, retail, and banking. These agencies provide services like event security, access control, and security personnel for escorting valuable goods and individuals. The need for private security agencies has arisen due to the inability of government agencies to provide sufficient security services. With a growing population and an increasing number of businesses, it has become challenging for the government to manage security for each individual and business. This has led to the need for private security agencies that can provide personalized and professional security services to meet the needs of their clients. To ensure that these agencies function in a regulated manner, the Private Security Agencies Regulation Act (PSARA) was enacted in 2005. The PSARA Act regulates the functioning of private security agencies and lays down the eligibility criteria for obtaining a PSARA license.
B. Importance of PSARA License
PSARA license is of utmost importance for private security agencies in India. With the increasing crime rate, the need for private security services has risen, and the PSARA license serves as a guarantee that the agency conforms to all the guidelines set by the PSARA Act. Obtaining this license not only ensures the smooth functioning of the agency but also helps in gaining the trust of potential customers. Here are some of the benefits of obtaining a PSARA license:
– Provides a trust symbol that the private security agency is dependable and managed by an organization with verified security guards.
– Empowers training centers and recruitment centers for security guards and supervisors, leading to more business and accreditations.
– Avoids denial of rights and services.
– Helps in gaining the trust of potential customers.
Moreover, the PSARA license gives power to the security agents, but it also comes with certain responsibilities and compliance requirements under various Acts such as Profession Tax, PF, ESIC, GST, and Income-tax. Overall, obtaining a PSARA license is critical for private security agencies in India to operate legally and provide reliable services.
II. PSARA Act
A. Background and enactment of PSARA Act
The Security Agency Regulation Act (PSARA) 2005 was introduced to regulate and govern private security agencies in India. Before this legislation, private security agencies could operate without any background checks or legal framework. This act helps prevent these agencies from interfering with law and order and ensures that they do not engage in illegal or criminal activities. The PSARA makes it mandatory for private security agencies to hold a license, providing strict guidelines for their functioning. The state government where the agency is registered has the power to regulate its activities and formulate rules as required. The PSARA also sets criteria for the eligibility of security guards and supervisors, ensuring they have adequate training and skills. The PSARA (Amendment) Act 2019 made it easier to obtain the license online and introduced facilities like e-sign and geo-tagging. Overall, the PSARA Act plays a crucial role in ensuring public safety while regulating and streamlining the operations of private security agencies in India.
B. Purpose and provisions of PSARA Act
The Security Agencies (Regulation) Act 2005 (PSARA) has been established to monitor and regulate the activities of private security agencies in India. The purpose of this act is to ensure that security personnel are qualified, trained, and well-equipped to serve individuals and corporations with the highest degree of efficiency and safety. Under this act, all private security agencies are required to hold a license to operate and to comply with several legal requirements and labor laws to safeguard the security guards’ rights. The PSARA also defines the eligibility criteria for security guards and supervisors, including age limits, physical fitness, and other necessary qualifications. The Act further outlines the standards for the privatization of security guards, including the unique uniform, badges, and headgear, and photo identification cards. The Act also mandates that all security agencies must maintain a register to keep track of personnel and client-related information. Violation of any of these provisions can lead to the cancellation of the PSARA license. Under this Act, the state government has the power to regulate the security agency’s affairs and impose penalties or sanctions for non-compliance with the regulations.
III. Eligibility Criteria for PSARA License
A. Types of business entities eligible for PSARA License
There multiple types of business entities that are eligible for a PSARA license. These entities include sole proprietorships, partnerships, limited liability partnerships (LLPs), and private limited companies. However, it is important to note that the business must have a minimum paid-up capital of ₹10 lakhs and an office in the state for which it is seeking the license. Additionally, the business must have a minimum of 25 employees, of which at least 50% must have completed the prescribed training. It is mandatory for the business to have adequate insurance coverage for all its employees and it must not have any criminal cases pending against it. The PSARA license is crucial for any private security agency to operate legally in India, and therefore it is important for businesses to meet the eligibility criteria and obtain the necessary documents to apply for the license. Once the license is obtained, it must be renewed every year by paying the prescribed fees.
B. Criteria for Director/Principal Officer
The criteria for Director/Principal Officer in a private security agency include a few important aspects. First and foremost, the applicant must be a resident of India. Additionally, they must be financially sound and must not have any criminal background. Moreover, a copy of their Income Tax Return (ITR) has to be submitted as proof of their financial standing. The PSARA Act mandates that the Director/Principal Officer should be appointed only after obtaining a police verification report, which ensures that the individual is of suitable character and integrity. This is a critical requirement as the Director/Principal Officer will be responsible for the overall management and functioning of the private security agency. The PSARA Act also states that the Director/Principal Officer should possess the necessary skills and knowledge to competently discharge their responsibilities. Compliance with these eligibility criteria is essential for obtaining a PSARA License and operating a private security agency in India.
C. Qualifications for Security Guard
When it comes to the qualifications for a security guard, there are certain requirements that need to be met before they can be eligible for the role. These qualifications are set by the Private Security Agencies Regulation Act (PSARA) of 2005 in India. Some of the key qualifications that a security guard must possess include:
1. Age: The security guard should be between the ages of 18 and 65 years.
2. Physical Attributes: The security guard should meet certain physical requirements such as minimum height, weight and eyesight.
3. Educational Qualifications: The security guard should have at least completed their 10th grade of education.
4. Character Certificate: The security guard must provide assurance regarding their character, backed up by a certificate of good conduct.
5. Government Service Termination: The security guard must not have been terminated from any government service before.
Meeting these requirements reflects the level of professionalism and commitment expected by the PSARA from security agencies. By ensuring that security guards meet these qualifications, agencies are able to maintain a high level of trust and confidence in providing security services to their clients.
IV. Documents Required for PSARA License
A. Registration certificates
In order to obtain a PSARA license in India, private security agencies need to go through a series of steps and provide various documents as proof of their eligibility. One important requirement is obtaining registration certificates from several government bodies. These registration certificates include the Employees State Insurance Corporation (ESIC) Registration, registration under the Shops and Commercial Establishments Act, and registration under the Labour Act. These certificates are necessary to demonstrate that the agency is legally established and operating in compliance with relevant regulations. The agency must also provide proof of identity and address of its directors and employees, along with copies of their Income Tax Returns and two passport size photographs. Additionally, the agency must submit an affidavit as per Section 7(2) of PSARA 2005 and a signed Memorandum of Understanding (MOU) with a recognized training institute. All of these documents must be sorted accordingly and filed through an online portal, which also requires police verification. By fulfilling these requirements, private security agencies can obtain a PSARA license and legally operate within India.
B. Proof of identity and address
To obtain a PSARA license in India, private security agencies need to submit certain documents as proof of identity and address. These documents may vary from one state to another, but the common requirements are as follows:
1. Id proofs of the security guards.
2. Identity proofs of all the directors and employees.
3. Address proof of the registered office.
4. The affidavit obtained under the PSARA Act.
5. Logo for the private security agency.
6. Registration from the Employee States Insurance (ESI).
7. Documents of the Provident Fund (PF).
8. Copy of Income Tax Returns (ITR) of every director.
9. Character certificate of all the employees.
All of these documents need to be submitted along with a duly filled application for a PSARA license to the respective controlling authority. The proof of identity and address helps in verifying the authenticity of the private security agency and ensures that only legitimate agencies are allowed to operate in the country. Therefore, it is important for private security agencies to provide accurate and authentic documents to obtain a PSARA license.
C. Affidavit and Memorandum of Understanding
One of the mandatory requirements for obtaining a PSARA license in India is to submit Affidavit and Memorandum of Understanding (MOU) along with the application. The affidavit should be in the prescribed format provided by the state controlling authority and must be signed by the authorized signatory of the security agency. It contains information about the antecedents and criminal records of the principal officer, director, and other key members of the security agency. An MOU needs to be signed between the security agency and a recognized training institute for the training of security guards and supervisors. The MOU should be submitted in the prescribed format provided by the state controlling authority and must be stamped and signed by both parties. It is important to ensure that the MOU mentions the type of training to be provided, the duration of the training, and the fees to be paid. Submitting the Affidavit and MOU in the correct format and on time can avoid unnecessary delays in obtaining the PSARA license.
V. Procedure for Obtaining a PSARA License
A. Filing of application and payment of required fee
Applying for a PSARA license in India involves filing an application with the state controlling authority of the concerned state. The application must be accompanied by the requisite documents, such as proof of identity and address, registration certificates for other necessary registrations like GST, PF, ESIC, Gumasta, etc. The application fee for PSARA varies depending on the type of license sought. It could be for a state, five districts, or one district. The total cost includes PSARA government fees, document preparation charges, police challan, and reimbursement expenses. The charges for office setup, shop establishment, and professional tax are excluded from these costs. The payment for the PSARA license is collected progressively. The payments are divided into multiple steps, including ancillary registration, MOU with training institute, government fees payment, reimbursement expense, and professional fees payment. Our team at Legal Adda provides complete PSARA license packages and assistance in documentation preparation, filing, and subsequent follow-up for a hassle-free experience.
B. MOU with training institute
As the Private Security Agency Regulations Act, a Memorandum of Understanding (MOU) with a recognized training institute is mandatory for PSARA License application. The MOU should be undertaken with a PSARA Training Center that has the facility to train security guards as per prescribed subjects which include conduct in public, correct wearing of uniform practices, physical security including asset, property, personnel, and household security, examining of papers like identity cards, passport, RTO documents, Smart Cards, working knowledge of English to identify documents, crisis response, and disaster management, handling and operation of non-prohibited weapons and firearms (optional), badges of rank in police and military forces, and different types of arms in use in public and police.
It is essential to obtain a minimum of 120 hours of training for security guards before they start working as security personnel. To prepare the MOU, a business registration proof, any one owner ID proof, and INR 15000 (inclusive of taxes) are required. The MOU includes free training of security guards up to 2 guards/owner/supervisor, and then after, training charges per guard will be applicable. The MOU with the training institute is a prerequisite and vital step towards obtaining a PSARA License.
VI. Documents Required for Psara License
The Private Security Agencies Regulation Act (PSARA), 2005 regulates the functioning of private security agencies in India. Private security agencies require a Psara License to operate legally. To obtain a Psara License, the following documents are required:
- Company registration certificate
- PAN Card of the company
- GST registration certificate
- Identity proof of the directors/partners of the company.
- Address proof of the company and its directors/partners.
- Memorandum of Association (MOA) and Articles of Association (AOA) of the company.
- Police verification of each employee of the company.
- Reference letter from three clients that have availed security services from the company.
- Advantages of Psara License
- Legal validity: Obtaining Psara License makes the private security agency legally valid to operate in India.
- Increased Credibility: A Psara License adds to the credibility of a private security agency making it more attractive to clients.
- Increased business opportunity: A Psara License increases the business opportunity as many government contracts require private security agencies to have this license.
- Standardization of security agencies: The Psara License lays down specific requirements that need to be fulfilled by private security agencies in India. This leads to standardization and uniformity of service.
VII. Disadvantages of Psara License
- The process of obtaining the Psara license is lengthy and time-consuming.
- The cost of obtaining and maintaining the license can be high.
VIII. Process of Getting Psara License
The process of obtaining a Psara License is lengthy and requires several steps to be completed. The key steps involved in obtaining the license are:
- Company registration: The private security agency must be registered as a company under the Companies Act, 1956 or the Companies Act, 2013.
- Security clearance: The directors of the private security agency must have a security clearance certificate from the Ministry of Home Affairs.
- Application for the Psara license: The application for the Psara license has to be made to the respective state police department.
- Police verification: All employees of the private security agency must undergo police verification by the local police station.
- Approval from the state Home Ministry: The state Home Ministry has to approve the application for the Psara license.
- Issuance of the license: After the approval, the state police department issues the license.
IX. Types of Psara License in India
There are three types of Psara License in India:
- Psara License for individuals
- Psara License for partnership firms
- Psara License for private limited companies.
X. Frequently Asked Questions about Psara License in India
- Who requires a Psara License in India?
All private security agencies that operate in India require a Psara License to operate legally.
- What is the validity period of the Psara License?
The validity period of the Psara License is five years, after which it needs to be renewed.
- Is there a separate procedure for renewing the Psara License?
Yes, there is a separate procedure for renewing the Psara License. The process is similar to obtaining a new license,
and all the required documents must be submitted for renewal.
- Can a security agency operate in multiple states with one Psara License?
No, a separate Psara License is required for each state in which the private security agency operates.
- Is it mandatory for all employees of a private security agency to undergo police verification?
Yes, it is mandatory for all employees of a private security agency to undergo police verification.
- What can be the consequences of operating a private security agency without a Psara License?
Operating a private security agency without a Psara License is a punishable offense under the PSARA 2005 and can
lead to penalties, fines, and even imprisonment.