Transcription
BUSINESS PLAN TO STARTA PRIVATE SECURITYAGENCY (PSARA LICENSE)
CONTENTSA. PRIVATE SECURITY INDUSTRY IN INDIAB. MARKET TRENDSC. PROCESS TO START A PRIVATESECURITY AGENCY IN INDIAD. PSARA LICENSEE. MODE OF BUSINESSF. INDUSTRY PREDICTIONS
PRIVATE SECURITY INDUSTRY IN INDIAThe Private Security Services sector in India has seen a tremendous growth owing to an increase indemand for security guards in private as well as public areas.The Private Security Agency (PSA) industry has seen a spike in the number of security servicesbusinesses in the past few years due to an increase in number of offices, IT parks, metro stations,malls, hotels, airports, public events and gatherings.The PSA sector in India is a mixture of home-based private players as well as internationalcompanies due to the high growth rate and profit margins in the sector. Nonetheless, with anincrease in number of crimes and terrorism, and demand for private security, starting a PrivateSecurity Agency remains a profitable business option.
FACTORS THAT LED TO THERISE OF PSA SECTOR IN INDIA Rise in Urbanisation and direct increase in demand in X and Ycities. Increasing level of crimes and terrorism. Low police to people ratio in India. Rise in number of bank branches, ATMs, Malls, ShoppingComplexes, offices, etc. Rise in number of housing complexes and gated communities.
As per the Private Security Agencies Regulation Act, 2005 'Privatesecurity' means security provided by a person, other than a public servant,to protect or guard people or property or both and includes provision ofarmoured car service.‘Private Security Agency' means a person or body of persons, other thana Government agency, department or organisation engaged in the businessof providing private security services including training to private securityguards or their supervisor or providing security guards to any industrial orbusiness undertaking or a company or any other person or property.‘Private security guard’ means a person providing private security withor without arms to another person or property or both and includes asupervisor,
S.W.O.T. ANALYSIS OF PSA SECTORSTRENGTHSWEAKNESSESOPPORTUNITIES Low maintenancecost High profitmargins Strong regionaldemand High competitionrate Lack of trainedpersonnel High compliancerequirements Increasing numberof commercial andresidentialproperty High Demand dueto high crime rateTHREATS High attritionrate Security threats Highlyunorganisedsector
MARKET TRENDSINR 400 BillionEstimate value of thePrivate Security Industryin India9 MillionApproximate workforce inthe Private Security Industry
PSA Guards Employment In DifferentSectors in India20%41%39%Commercial SectorResidential SectorMiscellaneous
GEOGRAPHY-WISE DISTRIBUTION OFHUMAN RESOURCES IN PSA SECTOR30%30%25%22%25%18%20%15%10%5%0%5%
LAWS APPLICABLE ON A PRIVATESECURITY AGENCY1) The Private Security Agencies Regulation Act, 20052) The Payment of Wages Act, 19363) The Industrial Disputes Act, 19474) The Minimum Wages Act, 19485) The Employees' Provident Funds and Miscellaneous Provisions Act, 19526) The Payment of Bonus Act, 19657) The Contract Labour (Regulation and Abolition) Act, 19708) The Payment of Gratuity Act, 19729) The Equal Remuneration Act, 197610)The Inter-State Migrant Workmen (Regulation of Employment and Conditions ofService) Act, 1979
PROCESS TO START A PRIVATE SECURITYAGENCY IN INDIA
Decide theBusiness TypeAnd CapitalObtain LicensesandRegistrationsSet Up OfficeAnd ConnectWith Clients
KINDS OF PRIVATESECURITY ANAGEMENTSECURITYGUARDTRAININGINSTITUTION
CAPITALREQUIREMENTStarting a Private Security Agency (PSA)requires basic capital infusion to obtain anoffice space and pay salary to workforce. Otherexpenses would include: Obtaining the business licenses andpermits. Uniforms for Workforce Training of Guards.
BUSINESS REGISTRATIONA PSA must be given a legal identity by incorporatingit as a Private Limited Company, LLP, One PersonCompany, Sole Proprietorship or Partnership Firm.TRADEMARKIt is important to register the Logo of the business byobtaining Trademark Registration for it under theappropriate Trademark Classes.GST REGISTRATIONThe business must be registered under the Goods andServices Tax Act and have a valid GSTIN to function asa PSA in India.BASICREGISTRATIONS
ADDITIONAL REGISTRATIONSESI/PF REGISTRATIONS&E REGISTRATIONARMS LICENSEIf you are employing more than20 people in the company, youneed to have ESI registration.The PSA must ensure thattimely ESI/PF benefits areprovided to the hired guards.The Shop and EstablishmentAct of the state in which thebusiness would be operatedwould be applicable on thebusiness and the PSA mustobtain the State Shop andEstablishment Registrationaccordingly.In order to arm the guards,the PSA would require toobtain an Arms License. AnArms License is obtained fromthe state Authority in whichthe PSA would operate.
PSARA LICENSEIn order to operate as a Private Security Agency in any state in India, itis mandatory to obtain the Private Security Agency license, also knownas the PSARA license.The laws applicable on PSAs are laid down under the Security AgenciesRegulation Act (PSARA), 2005. Any application to obtain a PSARAlicense must be filed with the PSARA Controlling Authority along withthe applicable fees and requisite documents.There are 3 kinds of PSARA Permits: PSARA License to operate in 1 district. PSARA License to operate in 2-5 districts. PSARA License to operate in the entire State.
ELIGIBILITY TO OBTAIN PSARA LICENSE No person or company should be convicted in an offence of fraud. No person or company should be declared legally insolvent. No person or company should be convicted of any crime with apunishment of more than 2 years of imprisonment. No person or company should be associated with any illegal or bannedorganisation. No person or company should be disqualified by the government due totheir involvement in any activity of misconduct.
Certificate of Incorporation Details of Arms License MOA & AOA of Company/LLP Agreement/ Partnership Deed Affidavit as per the PSARA Act Ownership Proof for a place of business Identity Proof of all employees ID Proof of Directors/Partners/Proprietor Address Proof of Directors/Partners/Proprietor Character certification of all employees Registered Logo of the PSA.DOCUMENTSREQUIREDTO OBTAINPSARALICENSE
FEES PAYABLEPSA in 1 DistrictINR 5000PSA in 5 Districts- INR10000PSA in Entire State- INR25000(Karnataka- INR 50000)
ELIGIBILITY TOBECOME A GUARD The person must be a citizen of India The person must be more than 18 years of age and below 65years of age. The person must not have any objectionable character andantecedents The person must have passed the security training successfully The person must fulfil all physical standards. The person must not be convicted by a court The person must not be dismissed for misconduct from anyGovernment institution
The validity of a PSARA License is 5 years from the date ofPSARA registration. However, in the states of Chhattisgarhand Uttarakhand, a PSARA license is valid for 1 year.The process of renewal of PSARA License involves filing arenewal application within 90 days before the date ofexpiry of the license.
GROUNDS OF CANCELLATION OF PSARA LICENSE1)2)3)4)5)When the license was obtained on misrepresentation or suppression of material facts.When the license holder used false documents or photographs.When the license holder violated the PSARA Act or relating.When the license holder misused information obtained by him during the discharge of his duties as the PSA.When the license holder has misrepresented that the PSA is an instrumentality of the Government or such agency isor has been using a name different from that for which license has been granted;6) When the license holder has been impersonating or permitting or aiding or abetting any body to impersonate as apublic servant.7) When the private security agency had failed to commence its activities or engage a supervisor within the specifiedtime period.8) When the license holder is or has willfully failed or refused to render the services agreed to any person.9) When the license holder has done any act which is in violation of a court order or an order of a lawful authority.10)When the license holder has violated any other laws applicable on it.11) When there have been repeated instances in which the private security guard or guards provided by the PSA:a) failed to provide private security or were guilty of gross negligence in not providing such security.b) committed a breach of trust or misappropriated the property or a part thereof which they were supposed toprotect;c) were found habitually drunk or indiscipline.d) were found to be involved in committing crimes.e) had connived or abetted a crime against the person or property placed under their charge.12)When the license holder has done any act which poses a threat to national security, or did not provide assistance tothe police or other authority in the discharge of duty.
COMPLIANCERELATED TOWAGESCOMPLIANCERELATED ensationAnnual andSick LeavesPF, Bonus,GratuityPeriod ofTrainingInsurance
MODE OF BUSINESSFor a Private Security Agency, the mostsuitable form of business is a physical officewhere the agency can be run, guards can betrained and the clients can be connected from.However, in the current digital era, a PSA canbe run as a Hybrid business model as well,with an online presence to connect withpotential clients in the state digitally and aphysical office where the guards are trainedand other business operations are run.
HIRING GUARDSCONNECTING WITHCLIENTSOnly those individuals can behired as guards who fulfil theeligibility criteria set under thePSARA Act. Guards can be hiredas permanent employees, forwhich an Employment Agreementmust be put in place. Also, guardscan be hired on a contractualbasis, for which a ServiceAgreement can be put in Place.Connecting with clients wouldrequire marketing the businesson different digital and physicalplatforms.Marketing can be done onlinethrough Email and SMSMarketing/Paid Ads, etc.Marketing can be done offlinethrough contacting offices, malls,IT parks, newly establishedhousing complexes, etc.
INDUSTRY PREDICTIONSGrowthProjection at a20% CAGRHR GrowthTrends- 11.83Million by 202252% Share ofOrganisedSector by 2022
ABOUTCORPBIZCorpbiz is a technology-driven online platform that provideslegal and advisory services to businesses, be it small startupsor large corporate houses. Corpbiz is a renowned platform inIndia for all kinds of business-related services including newbusiness registration, government registrations, taxregistrations, Trademark, Compliance filings and management,to name a few.Corpbiz is supported by a team of Chartered Accountants,Company Secretaries and Lawyers, who hold subject matterexpertise in an array of business related services and can act asyour guide and partners for your requirements relating to: Business Registration as a company, LLP, OPC, etc. Government Registrations such as FSSAI License andRegistration, Trade License, PSARA License, S&ERegistration, IEC Registration, and much more. Trademark Registration under the right Trademark classes. Tax Registration such as GST Registration, ProfessionalTax/TDS/Income Tax filing. Annual ROC Compliance Return Filings.
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The Private Security Agency (PSA) industry has seen a spike in the number of security services businesses in the past few years due to an increase in number of offices, IT parks, metro station
