Risks for Managing an Unlicensed Security Company: Legal Penalties

Businesses must authenticate themselves through PSARA registration in order to lawfully operate a private security agency in India. However, trying to manage the agency without the proper registration can lead to serious legal consequences. No matter whether it is a small agency or a large security firm, avoiding unnecessary challenges is important to make the operation smooth. We will examine the fines and legal requirements associated with operating an unlicensed security business in this thorough guide. Look more in the sections below.

1. What Does It Mean to Operate an Unlicensed Security Company?

An unlicensed security company provides security services without securing a valid license. Not securing a valid PSARA security license demonstrates that the agency also does not comply with the state or local authorities. Conversely, complying with the security license registration demonstrates that the agency personnel are trained and the company is operating within specific governing law. But, without having met all the specific licensing criteria mandated by local and state regulatory bodies, which often include background checks. 

2. Difference Between Licensed vs Unlicensed Agencies

Here is the key difference between the licensed and unlicensed private security agencies’ operations:

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3. Legal Risks and Penalties for Operating Without a License

The unlicensed security agency looks unprofessional and maintains illegal operations. Without a valid license, it can expose the security company to various legal challenges. The legal penalties include:

• Incarceration: The agency may be imprisoned for a maximum of one year for violating the PSARA Act. 
• Fines: In case the violation is bigger, the agency may face at least Rs 10,000 to Rs 25,000 or both imprisonment and a fine. In addition, the non-compliance with the PSARA Act’s sections 8,9, or 11 can result in a potential fine. It might be as much as Rs 5,000 or Rs 25,000. 
• Business Shutdown: Either the business will be permanently closed or the license will be revoked. 

4. What are the Operational and Credibility Risks?

Apart from the legal penalties, the unlicensed agency faces additional challenges. Not only clients, but also the high-budget companies prefer the PSARA-licensed private security agency. But operating without a valid registration causes the loss of trust and damage. For the contracts, the government and private contractors look only for PSARA license holder agencies. However, without this crucial document, the businesses may lose these lucrative contracts. Managing the security agency without a license means bypassing the compulsory background checks, and training for security personnel leads to unqualified staff.

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5. Avoid Legal Issues – Security License Registration

The unlicensed security companies can avoid the legal challenges by following these key steps:

• Must obtain all supported documents and the mandatory PSARA license. Each state’s controlling authority is the place to obtain this license.

• A separate PSARA registration certificate must be obtained for each state in which you operate a private security agency.

• Ensure your agency is registered under the right business structure (company, Pvt Ltd, or LLP). The majority of Indian directors/shareholders is crucial. 

• All members (e.g., directors/shareholders or personnel) must be Indian and at least 18 years old or above. 

• They have clean criminal records and have not resulted in imprisonment of two years or more. 

6. Sum Up | Without  PSARA Registration, Unlicensed Security Agencies Face Challenges

The licensed agency looks more credible. The PSARA-recognized agency gains approval from the government to operate legally. Holding a valid license demonstrates that the agency complies with all rules and regulations. The agency looks professional. However, in the case of an unlicensed agency, they operate without a valid license. It causes inconsistent service, a lack of credibility, and accountability. Apply now for the PSARA security license. Otherwise, seek the LegalRaasta consultancy for the security license registration. Our professionals will guide you throughout the registration process.

7. Frequently Asked Questions Related to PSARA License

Q1. How agency gain the legal approval with the PSARA license?

Ans. The PSARA security certificate is issued by the state’s controlling authority. It adds the layer of legal proof with the license. It determines that the agency is approved by the government.

Q2. What is the difference between authorized and unauthorized?

Ans. Being authorized means the respective service is being provided under the review of the government. Unauthorized means the agency has not approved a valid license and authorization from the government.

Q3. Who issues the security PSARA license in Punjab?

Ans. To obtain the PSARA registration certificate in Punjab, the applicant is required to register under the Home Ministry of the Punjab State Government.

Q4. What are the PSARA license fees in all of India?

Ans. The cost of the security registration license depends on the operation of the area. If an agency is operating in the entire state, the cost will be Rs 25,000.