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PSARA License for Manpower Supply Companies in Madhya Pradesh

PSARA Legal Team, Prospect Legal Pvt Ltd · Published · Updated · 5 min read
PSARA License for Manpower Supply Companies in Madhya Pradesh

Quick answer: A manpower supply company in Madhya Pradesh needs a PSARA license if it provides security guards or security services to clients, even as one part of a larger housekeeping or staffing contract. Because words like FACILITY and LABOUR SUPPLIER are not allowed in agency names in MP, many manpower firms obtain the license through a separately named entity.

Manpower supply is a large business in Madhya Pradesh, covering housekeeping, office assistants, drivers, data entry staff, loaders and more. Sooner or later, a client asks the manpower vendor to supply security guards as well. This is where the question of a PSARA license for manpower supply companies arises, and where many firms unknowingly step outside the law.

When does a manpower company need a PSARA license?

The Private Security Agencies (Regulation) Act, 2005 regulates any person or entity providing private security services, including the supply of security guards. Section 4 states that no person can carry on or provide private security agency business without a license. The Act does not exempt a firm because security is only a small part of its services.

What you supplyPSARA license needed?
Housekeeping, office boys, drivers onlyGenerally no, as no security service is provided
Security guards or supervisors, alone or with other staffYes
Staff described as "watchmen" or "gatemen" who perform guarding dutiesVery likely yes; the function matters, not the label
Integrated facility contract including securityYes, for the security component

Relabelling guards as "attendants" in an invoice does not change the nature of the work. If in doubt, take advice before signing the contract. Our post is a PSARA license mandatory for security guard companies in MP discusses this further.

Risks of supplying guards without a license

  • Penalty under Section 20: fine up to Rs 25,000, imprisonment up to one year, or both
  • Disqualification from tenders that require a PSARA license as pre-qualification
  • Clients terminating contracts once their compliance team notices the gap
  • Difficulty in obtaining a license later if past violations come to light

The naming problem for manpower firms

Since 2022, Madhya Pradesh does not allow the following words in a security agency's name: DETECTIVE, INVESTIGATION, SURVEILLANCE, INTELLIGENCE, INTERROGATION, FACILITY and LABOUR SUPPLIER. Many manpower businesses are named "Facility Services", "Facility Management" or "Labour Suppliers". Such a firm cannot obtain a PSARA license under its existing name.

There are two practical routes:

Option A: Change the name of the existing entity

Suitable when the firm wants one brand for everything and the name change is administratively simple, such as in a proprietorship. For a company or LLP, the name change goes through the registrar and every registration (GST, EPF, ESIC, Gumasta, bank) must then be updated. It can take time.

Option B: Form a separate security entity

Many manpower groups prefer a separate firm or company dedicated to security, with a compliant name. This keeps the security business, its guard records and its PSARA obligations ring-fenced, and lets the manpower business continue unchanged. The new entity needs its own registrations and its own office proof in MP. We can set this up through our company and firm registration service.

Before choosing a new name, check it on the PSARA portal. If the same name already exists, it must be changed.

What manpower companies already have, and what they lack

A running manpower firm usually holds several of the required documents. The gaps are typically PSARA-specific.

Usually in placeUsually missing
GST registrationTraining certificate from an MP PSARA registered institute for owners, partners or directors
EPF and ESIC registrationsMoU with an MP PSARA registered training institute
Shop Act (Gumasta)Guard uniform, logo embroidery, demo ID card and four-side guard photographs
ITRs and PANPSARA-format affidavits
Labour license (in many cases)Office banner and photographs showing the security agency name

For the full lists by entity type, see documents required for MP PSARA registration.

Operational differences once you supply guards

Supplying security guards brings obligations that general manpower staffing does not. Under Section 10, every guard must be an Indian citizen aged 18 to 65, with character and antecedents verified and trained as prescribed. You will need to:

  • Recruit separately for security roles and verify each guard
  • Arrange training through your MoU institute
  • Issue uniforms and ID cards that carry your licensed agency's name
  • Maintain guard-wise records for deployment and compliance
  • Bill security services under the licensed entity

Handling integrated contracts

Hospitals, colleges and corporate campuses often issue a single facility management tender covering housekeeping, gardening and security. If your group holds the PSARA license in a separate entity, discuss with the client whether the security component can be awarded to, or subcontracted with the client's approval to, the licensed entity. In every case, the guards on site should be employed, trained and identified through the licensed agency, and the client should be able to see a valid license copy for that entity. Read the tender terms carefully, because some clients require the bidder itself to hold the license.

Government fees and district coverage

The MP registration fee is Rs 5,000 for one district, Rs 10,000 for up to five districts and Rs 25,000 for the entire state. Manpower firms with contracts in several cities should choose coverage that matches their security sites. More detail is on MP PSARA license government fees. Our professional fee is quoted separately after reviewing your case.

How we help manpower companies

  1. Review your current services and contracts to confirm whether PSARA applies
  2. Advise on renaming versus a separate entity, and check name availability
  3. Arrange owner training and an MoU with a registered institute
  4. Prepare all PSARA documents, formats and affidavits
  5. File on psara.gov.in, reply to queries and follow up until the license is issued

If your manpower company is already being asked for guards, start with our MP PSARA license registration service or call us to discuss your structure.

Frequently Asked Questions

We supply housekeeping staff and only two guards to one client. Do we still need PSARA?

Yes. The PSARA Act does not provide an exemption based on the number of guards or the share of security in your business. If you provide security guards to any client, you need a license. Supplying even a small number without one can attract penalties under Section 20.

Our firm is called ABC Facility Services. Can it get a PSARA license?

Not under that name. Since 2022, MP does not permit the word Facility in security agency names. You can either change the name of the existing entity or form a separate security firm or company with a compliant name, which many manpower groups prefer.

Can the same owners run both the manpower firm and the security agency?

Generally yes. The same individuals can own both entities, provided each owner meets PSARA eligibility, completes the required training, and the security entity has its own documents and office proof in MP. Keep the security business's guard records and billing separate.

Does our existing labour license replace the PSARA license?

No. A labour license under labour laws and a PSARA license under the Private Security Agencies (Regulation) Act serve different purposes. A labour license, if available, is listed among supporting documents for firms and companies, but it does not authorise you to provide security services.

PSARA Legal Team, Prospect Legal Pvt Ltd

Our team at Prospect Legal Pvt Ltd, Bhopal works on MP PSARA license registrations, renewals and corporate compliance for private security agencies across Madhya Pradesh. Every article is prepared and reviewed by our legal and compliance professionals.

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