1. Steps to Starting a Security Company
2. Requirements for Operating a Security Business in Michigan

How to start a security company in Michigan? Make sure you have the minimum level of education and experience stipulated for licensing and don't have any disqualifying conviction on your record. Create a business entity, register for taxes, get an insurance or surety bond, obtain the necessary licenses, and begin your business operations.

Steps to Starting a Security Company

  • Have a business plan: Prepare a business plan after thoughtfully considering all the important factors like setup costs, operational costs, target market, and break-even point.
  • Create a legal business entity: Operating as a separate legal entity saves you from personal liability in the event of your security company being sued in court.
  • Register for taxes: Register your business for various state and federal taxes.
  • Open a bank account: Set up a business checking account for your company business. It will help you keep your personal finances separate from business transactions.
  • Set up an accounting process: It's important to record your business transactions to evaluate the financial performance of your company. It will also simplify your tax computation and filing.
  • Obtain permits and licenses: Find out what permits and licenses are required to operate a security business in your state and city. Make sure you obtain all the necessary licenses. Failure to do so may subject you to hefty fines and may even force you to shut down your business.
  • Get business insurance: If you have employees, you may be under a legal obligation under state law to buy workers' compensation insurance. Even otherwise, taking an insurance policy protects you from unforeseen business risks and liabilities.
  • Create a brand: Having a brand helps you create a unique identity in the market. It's an effective way of communicating what your company stands for and what customers can expect from your services.
  • Go online: Having a company website gives a professional touch to your business. It makes it easy for your customers to learn more about your company and services. In addition to a company website, you can also use online advertising and social media to attract new customers.

Requirements for Operating a Security Business in Michigan

Private security business in Michigan is regulated by the Michigan Department of Licensing and Regulatory Affairs (LARA). Proprietors and managers of private security agencies are required to maintain high standards set out by the state authority.

Security business employees are not subjected to a screening process by the state. However, managers heading a security agency are legally responsible for the conduct of their employees.

Some of the important requirements applicable to security agencies in Michigan include the following:

  • You must have a resident manager based in Michigan.
  • You must be at least 25 years old and have a minimum of high school level education.
  • You must have a minimum of two to four years of qualifying experience.

Qualifying Experience

The state of Michigan accepts the following experience for issuing a security agency license:

  • Four years of supervisory level experience as a security employee
  • Three years of independent experience outside the state
  • Two years of experience as a security employee plus a baccalaureate degree in industrial security
  • Four years of experience as a federal, state, county, or city police officer
  • Two years of experience in military police with a basic knowledge of physical protection, regulation enforcement, security operations, correctional institutions, and reconnaissance and surveillance

Disqualifications

You will not be eligible for a security agency license if you have any of the following disqualifications:

  • If you have a felony conviction on your record
  • If you have been convicted of fraud, illegal use of a firearm, impersonation of a police officer, or certain other offenses within five years prior to your licensing application
  • If you have been involved in more than one alcohol-related offense
  • If you have been dishonorably discharged from the military
  • If you have been judged insane and no sanity has been restored by court

Insurance Policy or Surety Bond

In order to be eligible for a security agency license in Michigan, you must either buy an insurance policy or furnish a surety bond.

The insurance policy must cover at least:

  • $25,000 for property damages,
  • $100,000 for injury of one person (including death), and
  • $200,000 for injuries to more than one person.

If you are furnishing a surety bond, it must be for a minimum amount of $25,000.

If you need help with how to start a security company in Michigan, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.