A security system functions and plans after knowing the security requirements. How to start a security company to protect people and earn profits? The security service sector gets tapped by entrepreneurs to get a prominent solution to safety problems. A security agency enforces rules and regulations, responds to threats and emergencies, etc.
Did you know?
Homes without security systems are 300% more likely to be broken into. According to a Hindustan Times report, in the first six months of 2021, 1,173 burglaries were reported, 40% more than the corresponding period in 2020.
Steps to opening a Security Company
How to start a Security Company
In the initial stage, a plan needs to be prepared, which is required before beginning any new business. The plan demands a good amount of research on the business that helps an entrepreneur proceed with their idea. Some important criteria to be considered while preparing a plan – are the type of security service, the business strategy, and how to finance the business. Extensive training of about six to eight months to nourish skills in the area is required. The issuance from the government for an eligibility certificate to commence the business.
The Company and Its Registration
After the initial work of planning for a business, the company's registration should take place for the execution of the plan. An entrepreneur needs research on how to start a security company, and it is necessary to register a security company or an LLP. The following are some points on how to start a security company :
1. The Nature of Company
It is a must for the company to become an LLP or business entity. An entrepreneur must purchase a business licence for their entire security arm. The GST registration of the business entity needs to be done, and the taxpayer gets registered under Goods and Services Tax.
2. Documents Necessary for Registration
An entrepreneur must have the required documents: PAN card, ID proof (Aadhaar Card, Driving Licence), Address proof (telephone bill, electricity bill), and Passport size photo. The documents before their submission should be scanned and with no hard copy. The prescribed documents with the details should be correct and true to his/her knowledge.
3. The Company's Name
The entrepreneur has to think about the proper name of their company.It should not be general or should not match the name of an existing company. The company's name should not be related to reserved words such as President and Prime Minister.
4. Investment of Capital
After the documents are prepared and the name filing is complete, the entrepreneur has to decide about the capital invested. To register the company, there are no criteria for minimum capital. Capital should be enough for an entrepreneur to pay the salaries of guards and staff.
5. Registered Office
An office has to be set up in the end, registered as the head office for your company. You can even register your own home. Professional and legal documents from the government would be addressed to that office.
Applying for PSARA Licence
An employee receives added benefits after receiving a PSARA licence as it is obligatory, and without it, no company can commence their business. The process to apply for a PSARA licence varies in each state of India, so it becomes important to note the specifications in the region. These are the following steps:
- An applicant must collect all the necessary documents such as PF, Pan Card, GST, ESI, ITR of every director, TAN number, etc.
- A signed MOU needs to be affixed along with a reputed training institute in the next step. Supervisors and guards receive and gain proper training to learn about their duties and their job.
- The entrepreneur has to go through police verification for the same, and an application needs to be filled in form – I. If an applicant turns out to be a firm or a company, for every partner director, a separate verification form needs to be filled up.
- After verification from the police is over, the entrepreneur has to procure a no-objection certificate from them. The police authorities grant a no-objection certificate receipt to the entrepreneur, or he may face rejection.
- The PSARA licence and its process of verification take around 60 days. The entrepreneur has to wait for the specified period.
Several rules, regulations and guidelines of the Private Security Agencies Regulation Act are integral for security companies to follow. Security agencies and refining their functionality is the primary motive of PSARA. The agencies get to know and meet necessary conditions that include specifications on eyesight, health conditions and uniform of security guards.
- It must hire supervisors to administer the obligations of appointing guards.
- The security companies regulate special training sessions for security guards to learn the required skills.
- While researching how to start a security company, it is significant to give first preference to an ex-defence candidate with three years' experience over others.
- Security guards' criteria, qualifications, and disqualification are a must for security companies to follow laid down by the PSARA Act.
Also Read: Top 10 Business Ideas After Lockdown
Company Registration Online
As registrations occur online, an entrepreneur should visit the MCA portal with digital signatures to fill out the forms. Digital Signature Certificates are necessary for the subscribers and directors of the AOA and Memorandum of Association.
The certificates can be acquired from government recognised certifying authorities such as Protean e-Gov Technologies Limited, National Informatics Centre, IDRBT Certifying Authority etc.
While researching how to start a security company, the security company director needs to acquire a director identification number. It should include the name and address proof, which must be laid down in the company's registration form. This particular identification number can later be obtained after filling up the SPICe+ form or the company registration form.
SPICe+ is a web-based company registration form, which should be filled up to acquire DIN for three directors maximum. Suppose a security company has more directors without a director identification number. The company can be incorporated with three directors, and new directors can be appointed later after incorporation. Appointed directors can acquire a DIN by filing the DIR-3 form, as only the proposed directors of an existing company can apply for form DIR-3.
Company Registration on MCA Portal
The SPICe+ form should be filled out for submission on the official website of the Ministry of Corporate Affairs. For submitting documents and form filling, it is mandatory to visit the company's director to register on the MCA portal. Access to the MCA portal for viewing public documents and filing e-forms happens for the director after a successful registration.
The name of the security company must be reserved as well by submitting two proposed names in Part A of the SPICe+ form. The company name should be original and must not be similar to the name of an existing or registered company or LLP. Some prohibited words cannot be a company's name as mentioned in the Companies (Incorporation Rules) 2014. If the company does not meet such conditions, the SPICe+ form will be rejected.
Certificate of Incorporation
After the registration application is submitted along with the necessary documents, the Registrar of Companies will examine it and its significant research on how to start a security company. He issues the Certificate of Incorporation after verifying that the application is over. Along with PAN and TAN, the certificate is issued by the Income Tax Department. The applicant receives an electronic mail with the Certificate of Incorporation as an attachment and PAN and TAN.
A security agency provides security-related human resources to companies, housing blocks, and other structures. If you have been planning to open a security company, these are the basics that you need to know.
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