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Can a Person Operate a Security Company Without License in 2023?

No, unlicensed security work is strictly against the law. Any company or individual who provides unlicensed security guard services could face severe consequences including fine, arrest, and even jail time depending on the nature and number of offenses.

The law is quite clear —get trained or go to jail. Depending on where you live, the licenses you are required to hold vary. Usually, you will need work experience in the security field – unless you previously worked in law enforcement. Note there are certain laws and regulations that vary by state.

For instance, in California, only a licensed private patrol operator can provide security services for a person or business. Even active duty police officers are expected to obtain this card if they are going to work as a security officer or bodyguard.

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When starting a security company in a state like California, it is necessary to make sure all your employees meet the requirements for obtaining this card. In most cases, you can obtain this license from the Commissioner of Emergency Services and Public Protection in your state.

Generally, anyone looking to start a security company is expected to be at least 25 years old. In addition, five years of experience working as a supervisor for a security-related field or 10 years experience as a police officer is generally required. Note that time spent as an investigator doesn’t qualify the individual for a license.

The cost of starting a security guard company is indeed minimal. The largest cost is insurance, which can be up to $3,000 for a 6-month term.

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Legal and regulatory costs will run about $500. The cost of basic equipment and uniforms varies. If guards have their own firearms or force equipment, then the cost will be minimal. If not, they can range from just a couple hundred dollars for a used handgun to several thousand dollars.

Types of Licenses Needed to Operate a Security Company

  1. Security Guard License

Note that you are expected to prove that you possess the necessary skills to be a security guard. In California, for example, you must get 32 hours of training in security guard skills from a California Bureau of Security and Investigative Service-approved course.

  1. Private Patrol Operator License

You are also expected to prove that you have the necessary skills and experience to operate a security guard company. In Michigan for example, you must be 21 years or older, have a high school diploma or an equivalent, and have not been convicted of a felony.

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Additionally, you must show at least four years of security guard work experience in a supervisory capacity above the rank of patrolman. The licensing fee ranges from $100 to $300, depending on the legal organization of your company.

  1. General Business License

A general business license is required by each state, city, or other governmental jurisdiction for any type of business. This gives the business owner the authority to conduct its operations and allows the government to monitor its activity and levy taxes.

  1. Service Vendor’s License

A service vendor’s license is required in some states such as Ohio, which taxes private investigation and security services.

  1. Firearm License/Permit

A firearm permit is needed only for those security companies whose officers will carry hand guns. Each officer must pass a basic firearm training program approved by the state. In the state of Connecticut, the officer must be at least 21 years of age before a firearm license can be issued.

  1. Qualified Manager License

Your security guard company is expected to be run by a person with a qualified manager license in all services your business provides.

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In Texas, for example, you may provide an armored car, guard, alarm, and guard dog services, therefore the qualified manager needs to know how to provide those services with at least two years of consecutive experience in each service. The application fee starts at $37.

  1. Insurance

No security company should operate without the proper insurance. You have to make sure you cover your business in case something happens to a client. Bonding insurance can also help to protect your company in the event that a client has a property that is stolen by anybody under your employ.

While this shouldn’t happen if you pay your employees well and do the proper background checks, a single incident by a disgruntled employee could cost your business if you aren’t adequately protected.

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What is the Penalty of Operating a Security Company without License?

If you operate without a license, here are penalties to expect;

  1. Possibility of Lawsuits

The security industry is indeed a delicate one and once you conduct business without a license, a customer might decide he is not pleased with you risking his/her life, and then possibly sue you using fraud as one reason for the lawsuit.

The fact is, running a security company without a license is a fraudulent act. If a plaintiff is successful in their lawsuit, and the business is found liable, the company is responsible for what the plaintiff paid for the product or service and possibly for damages in regards to the fraudulent activity.

  1. Loss of Reputation

If a security company is caught operating without a license, this can cast doubt on their ability to conduct business in an ethical or competent fashion. Clients could be left to draw the conclusion that if the company did not follow procedures to operate legally, they might not follow clients’ directives either.

  1. Forced to Close

A Security Company caught operating without a license could be forced to cease operations. In some cases, once the licenses are attained the business is free to reopen. But in some instances, the company might have to wait out a mandatory probationary period, or worse, a city can refuse to grant a license to the business.

  1. Fines And Fees

Not having a business license is illegal, but it is considered an enormous infraction in the security industry. Ideally, you could face local fines, fees, and possible back taxes.