Beginning a private security firm is a modern business and require top to bottom arranging. It is essential to take consultancy administrations from experienced individuals since when you compose security plan, you may disregard numerous fundamental issues. But you really can’t ignore the potential dangers involved with the workforce employed. The welfare of the workforce is indeed in the interest of your own business and in turn beneficial for the potential customers. So to ensure this aspect, you need to follow various legal compliances, such as ESI registration and PF registration.

1. Background of the private security business in India

The private security industry in India has its roots in early 1960s.  Till then, such services were confined to only some selective establishments such as hotels, banks, and palatial houses. Nowadays, this has become a mainstream business for many budding start-ups. The private security business has already dominated a market share of nearly INR 40,000 Crores or $6 billion in the FY 2015-16.

2. What is the most ideal way to start this business?

The most straightforward strategies to enter into this business is, through the channel called Armed Security for Cash Logistics, which involves giving cash logistic protections to private banks.

3. What are the risks involved in the private security business?                                          

The security services business need a considerate plan of action. It innately includes a couple of legal obligations. These include the following:

Ensuring that various employees are registered under ESIC and PF, i.e. the firm must have the ESI registration and EPF registration certificates.

4. Which is the best business form for private security business?

Getting licenses and registrations for the activities is a must for protection from the risk that arises due to the nature & size of the administration being given. In this manner, it is best for the beginners of a Security Guard Service Business to start their business on a Private Limited Company or a Limited Liability Partnership while launching their business idea.

Both Private Limited Company & Limited Liability Partnership offer the promoters restricted risk assurance, easy transferability of the business ownership and hence continuous business presence.

5. What are the rules of the Tax Registration for private security business?

The administrations gave by a security company are assessable under the CGST Act 2017 and consequently, security protect administrations that traverse INR 40 lacs must acquire GST registration. The security service agency / organization must charge 18% GST to the end customer while providing the security service. Very importantly, the applicable GST @ 18% on the Security Service is on the reverse charge basis, i.e. liability is of the customers who are availing such services.

6. Why ESI and PF Registration are needed?

In case of the Security Guard Agencies, mostly it is seen that the security guards are paid on the roll of the Security Guards Agency. For this reason alone, the government has necessitated that the security guards agencies must have the ESIC Registration & PF Registration.

Basically, ESIC registration is an obligation for those organizations that employ above 10 persons and similarly the PF registration is required for an association that has beyond 20 persons.

7. Whether any Security Agency License is also required?

Yes, the Security Guards Agency requires separate Security Agency License, called PSARA license. The government has presented the Private Security Agencies Regulation Act 2005 (PSARA). All Security specialist agencies are compulsory to get a permit under the PSARA 2005. The license has to be got from the Controlling Authority. The authority in many states is the Police Department itself. Otherwise the power rests with the Home Ministry of that particular state.

8. Whether legal permit is needed to start this business?

Yes. All the new security agencies must acquire the security office permit prior to commence this toe of business and offices from where such permit has to be got are under the purview of the Private Security Agencies Act, 2005.

The legal permit allows business for a time of one year without the permit from the hour of registration under the Act.

9. How to get this PSARA license?

The Security Agency PSARA License is given under 3 categories specifically:

  1. PSARA License to work Security Agency in 1 District,
  2. PSARA License to work Security Agency in 2-5 District and
  3. PSARA License to work Security Agency all over that State.

Once, the application is submitted to the Controlling Authority, the PSARA application processing will start. Whenever discovered fit, a permit to run a security agency is granted. This license is for a time of 5 years. The permit is sustainable toward the finish of its expiry till one year.

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