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An Overview of PSARA License

Nowadays, due to a rapid increase in the number of companies or business establishments, the demand for obtaining personal security has also considerably mounted. Hence, the reason behind the significant rise in the number of PSAs (Private Security Agencies) across the country is the growing trend of hiring security guards from private business establishments.

Even though these PSAs assist in meeting the security needs of the private sector. However, there was also a concern regarding the way these agencies work. Thus, the Private Security Agencies Regulation Act, 2005, was passed by Parliament. PSARA Act, 2005 lays down a set of rules concerning the registration of PSARA License and the proper functioning of private security agencies. PSARA Act, 2005 is passed by the Government to provide regulations concerning the Private Security Agencies. Moreover, the PSARA also keeps vigilance and checks over the Registration of the Private Security Agencies.

What are Private Security Agencies?

Private security agencies are those organizations that provide security services to various companies, banks, ATM's, hospitals, etc. These agencies also offer training to the security guards who are hired by agencies. A Private Security Agency must acquire PSARA License for its operation.

Advantages of PSARA License

Following are the advantages of a PSARA License in India:

  • Empowers the Training Company;
  • Attracts more customers;
  • Avoid Denial of the Rights and Services;
  • Helps in securing the trust of the Potential Customer;
  • Increases Credibility of the Agency;
  • Ensures the Smooth and Efficient functioning of the organization;

Eligibility Criteria for Applying for PSARA License

Following is the criteria for applying for PSARA License in India:

Eligibility Criteria for the Companies:

According to the Private Security Agencies Regulation Act, 2005, every entity or company wanting to get itself registered under PSARA is required to register itself as any of the following listed business structures:

  1. Sole Proprietorship;
  2. Limited Liability Partnership;
  3. One Person Company;
  4. Private Limited Company;
  5. Partnership Firm.

Eligibility Criteria for the appointment of Director or Principal Officer:

For being appointed as the director or principal officer of a Private Security Agency, one should fulfil the following listed criteria:

  1. He or she must be an Indian resident.
  2. He or she must have a sound financial standing (needed to submit a copy of the ITR as proof).
  3. The concerned person must not be sentenced for any offence and should have a perfect precursor past.

Eligibility Criteria for being hired as Security Guard

The following listed criteria must be fulfilled for being appointed as Security Guard in a Private Security Agency:

  • The person must be an Indian citizen.
  • The age limit of the concerned person should be between 18 to 65.
  • The person must have obtained proper training.
  • The person must not have been terminated or removed from any government service under any situation.
  • The concerned person must satisfy all the specified physical standards.
  • The person must assure the Agency about his character.

Who are not eligible for PSARA License in India?

Section 6 of the PSARA Act deals with the provisions concerning the disqualifications of an applicant. The following listed are the disqualifications due to which the applicant is not qualified to obtain licenses:

  • The applicant has been convicted for an offence concerning the formation, promotion, or the management of a company;
  • A court of competent has convicted the concerned applicant for the offences whose prescribed punishment is not less than two years;
  • The applicant has links or connections with an organization or association which is explicitly banned by any law for the activities against the public order or national security;
  • The applicant has been either removed or dismissed from the government service on the grounds of moral turpitude or misconduct:
  • The said company has not been incorporated in India;
  • The Proprietor of the concerned Company is not Indian;
  • An Indian does not hold the majority shareholding of the said company.

Documents Required for PSARA License

Although the documents required vary from one state to another. However, some of the standard documents needed for obtaining a PSARA License are mentioned below:

  • Identity proofs of all the employees and directors;
  • Address proof of the registered Agency;
  • A duly affidavit acquired under the Private Security Agencies Regulation Act, 2005;
  • Logo of the Private Security Agency;
  • PAN Card details of the promoters;
  • Two passport-sized photographs of the promoters;
  • Details of registration acquired from the Service tax department;
  • Certificate granted under the provisions of the Shops and Establishment Act;
  • ESI (Employee State Insurance) Registration;
  • PF (Provident Fund) Registration;
  • Affidavit of the Security Training;
  • Armed License;
  • Character Certificate for the employees;
  • Copy of the ITR (Income Tax Return) of each director;
  • Company’s Certificate of Incorporation;
  • Duly signed MOA (Memorandum of association) along with the training institute;
  • Details of all the Security Guard appointed.

Procedure to obtain PSARA License

The steps included in the procedure for obtaining PSARA License are summarised below:

Step 1: Arrange all the Documents:

The first and foremost step in obtaining a PSARA License is to collect every single important document, such as PAN (Permanent Account Number) Card, TAN (Tax Deduction Account Number), GST (Goods and Service Tax) Registration, PF Registration (Provident Fund) and ESI (Employee State Insurance) Registration, Registration under the Shops and Establishment Act, copy of the ITR (Income Tax Return) of each director or shareholder or partner and so forth. Once all the documents are arranged, the application can be filed online on the official portal. The presence of the digital signature makes the registration process hassle-free.

Step 2: MOU with a Training Institute:

The applicant is mandatorily required to enter into an MOU (Memorandum of Understanding) with the organization or institute involved in training security guards. The institute or the organization dealing in the training services must have obtained approval from the state controlling Authority. However, in these training programs, special relaxation and flexibility are being provided to the ex-servicemen.

Step 3: Application Filing:

Once the above steps are completed, the applicant must file the application Form-I with the respective state authority. This Form must be attested with Form-II (application for the verification for qualifications) and Affidavit in Form-III must be accompanied by Form-I.

Step 4: Police Verification

The candidate is required to apply for the police verification in Form – I. Where the Agency is a Company or a Partnership, the proposed Directors shall undergo Police Verification without any exception.

Step 5: Issuance of PSARA License:

When the application is attested with the NOC from the police after verification, the respective state authority will examine the same & then proceed to either accord the license in Form-IV or reject the same in case of any default.

Note: The total time required to complete the process of obtaining the PSARA License is sixty days starting from the date of filing the PSARA application. The process of obtaining the PSARA License varies from state to state.

The PSARA specifies the qualification, disqualification, and criteria for a security guard. And the applicant must engage supervisors to supervise the work of security guards. A person from the navy, army or air force with a minimum of three years of experience should be given preference.

What are the grounds for the cancellation of the PSARA License?

Section 13 of the PSARA 2005 provides the grounds for the cancellation of the license. The following listed are the grounds on which a PSARA License stands cancelled:

  • A license was acquired by way of Misrepresentation or Suppression of Material Facts;
  • A license was acquired by using false documents or photographs;
  • The License holder has either infringed the provisions of PSARA 2005 or the conditions in which the license was given;
  • The License holder has misused the information acquired during the discharge of the Agency's duties in offering security;
  • The License holder has misrepresented that it is an instrumentality of the Government;
  • The License holder has impersonated or abetted impersonation of some Government Servant;
  • The concerned Agency has failed miserably to operate post one year of the grant of license;
  • License holder failed miserably to provide services agreed to another person;
  • License Holder has either done or lent his or her assistance in doing, something which was in contravention of a Court order;
  • That the license holder poses a threat to national security.

When is a Security Guard Disqualified to be Hired?

There have been several repeated instances where the guards employed by the Security Agency:

  • Found guilty of gross negligence;
  • Committed Misappropriation or Breach of Trust of property they were meant to protect;
  • Were found drunk or undisciplined;
  • Found guilty of serious crimes;
  • Had schemed against the property which they were expected to protect.

Guidelines for the Renewal of PSARA License

The validity of a PSARA License is five years since the issuance of the said license. However, the state of Uttarakhand and Chhattisgarh issues licenses for one year. PSARA License is required to be renewed after its expiry. The following steps need to be followed for the renewal of the PSARA License:

  • The applicant must apply for the renewal of his PSARA license not less than ninety days before the license expiry date.
  • The application form must be submitted together with the documents as prescribed under Sections 6, 7, and 11 of the PSARA with the prescribed fees.

What are the Compliances as per PSARA?

Under the PSARA regulations, the private security agencies are needed to follow certain prescribed compliances. The following listed are the compliances that are to be complied with:

  • Private Security Agencies must hire supervisors to supervise the working of the guards appointed in the organization.
  • These security agencies are obligated to train the security guards hired in their firms.
  • PSAs are mandatorily required to give priority to the ex-defence candidates who hold at least three years of experience.
  • The PSAs are required to follow every qualification, criteria, and disqualification prescribed under the PSARA.
  • According to PSARA, security guards should follow the specified uniform policy.

What are the Amendments made in the PSARA?

Recently, the Private Security Agency Licensing Portal has been unleashed by the Government. This portal comes with the features of a Single-Window System for enabling licensing across the nation. The Private Security Agency Licensing Portal is being linked with the ICJA (Integrated Criminal Justice System) for the antecedent verification. This portal has simplified the process of online payment of licensing fees, together with the facilities of e-sign. However, to date, there are only some states that accept online procedures. In contrast, some states are still in the stage of acceptance.

Major Amendments in 2019:

  • After the launch of the Private Security Agency Licensing Portal, there is no need to manually apply for police verification of the details concerning Directors/Proprietors/Partners for the grant of a PSARA License.
  • Controlling Authority is compulsorily asked to utilize electronic databases of crime and criminals such as CCTNS, ICJS, and other similar facilities for verifying the applicant's antecedents.
  • Electronic mediums like the Demand Draft or the banker’s cheque will be accepted for fees.
  • The Centre has made the National Skill Qualification Framework (NSQF) mandatory and compulsory from 27th December onwards.
  • Based on the complete training and job requirement, the Private Security Agencies will hire ex-defence personnel. However, no agency shall appoint any of the ranks of the paramilitary forces, armed forces, or state police forces.
  • The Character and Antecedent Certificate, if once granted, the same will be valid for three years regardless of the change in employment status.
  • The Controlling Authority, either Suo Motu or its officer, should verify the premises being used by the private security agency as the registered address.
  • The Controlling Authority should have a physical copy of the PSARA License. The same is then required to be delivered by a speed post within fifteen days of the issuance to the registered office of the PSA (Private Security Agency). The private security agency is mandatorily asked to display the same at its place of business.

FAQs on PSARA License

The respective state authorities have the authority to grant PSARA License on an individual basis.

If an individual wants PSARA License just for one district, then the fee charged will be Rs 5000. However, if he/she wants for License for 5 districts or for a Whole State, then the fee charged will be Rs 10000 and Rs 25000 (Except in Karnataka: Rs 50000), respectively.

A PSARA License is valid for a period of 5 years starting from the date of enrollment in most of the Indian states apart from Uttarakhand and Chhattisgarh. Both of these states grant PSARA License for 1 year.

For the Renewal of PSARA License, one should apply at least 90 days before the expiry date of the license.

Yes, although the Indian Parliament had passed a primary law known as Private Security Agencies (Regulation) Act, 2005, for regulating and governing the private security business in India. However, this act provides that every state or union territory must have the power to appoint its controlling authority and frame procedure and rules for the issuance of PSARA Licence.

No, according to Section 4 of the PSARA Act, 2005, in case an agency wants to offer security services abroad, it needs to first obtain the permission or approval from the Controlling Authority. However, the controlling authority must consult the Central Government before giving permission to operate abroad.

Any person who is disqualified as per section 6 of the PSARA Act, 2005, is not qualified to apply for PSARA License.

Yes, as per Section 7 (4) of the PSARA Act 2005, the Controlling Authority needs to act on the application (whether to issue or refuse to grant the license) within 60 days, starting from the date of receipt of the application.

An Individual, One Person Company, Partnership Firm, Limited Liability Partnership, Private Limited Company are qualified and eligible to apply for PSARA License.

A Private Security Agency (PSA) is either an individual or a group of people who are distinct from the Government and are involved in the business of providing Private Security Services. Further, PSA services include training of guards/supervisors or providing guards/supervisors to any other business undertakings.

Every State Government needs to appoint an officer of the Rank of Joint Secretary in the Home Department or an officer of equivalent rank to serve as the Controlling Authority under the PSARA.

No, a Private Security Agency is not allowed to use words like ‘Indian’, ‘National’ in its name. The reason behind this is that these words give the impression of Government patronage.

Yes, if an applicant wants to operate his/her business in more than one state, then he/she needs to apply for a separate PSARA License. Moreover, the process for obtaining PSARA License differs for each state.

No, a foreign company is not eligible to apply for PSARA License in India.

No, a Non Resident Proprietor is not eligible to apply for PSARA License in India.

Yes, FDI (Foreign Direct Investment) up to 49% through Approval Route is allowed in a PSA registered under PSARA Act.

Yes, there is a prescribed physical standard for Guards Training under the PSARA Act.

Yes, the applicant must make sure that each guard has been issued a Training Certificate by a recognised training institute of State.

The term “Verification of Character and Antecedent” denotes a process to obtain No Objection Certificate from the office of the Deputy Police Commissioner.

No, it is not a compulsory requirement to have an Army men or Ex-Service men available while applying for PSARA License. That means anybody who is willing to start a Private Security Agency in India can apply for this License.

Yes, as per section 12 of the PSARA Act 2005, it is compulsory for every private security agency registered under the act to display a copy of license in a conspicuous place of his/her registered office.

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