In a bid to enhance the safety of lives and properties in Nigeria, private security companies have played an active role over the years. This sector has also been a major player in the provision of job opportunities for Nigerians. The National Bureau of Statistics in its 2019 Private Security Guards Data recorded that 1,110 registered private security companies employed at least 828,502 people in Nigeria from 2013 to 2018. This data was supplied by the Nigeria Security and Civil Defence Corps (NSCDC), the agency authorised by law to supervise private security guard companies in Nigeria.

This article provides requisite information concerning the legal requirements for setting up a private security guard company by virtue of  the Private Guard Companies Act, CAP P30, LFN 2004.

Grace Kalu, Esq.
Associate (IP, FinTech & Regulatory Compliance)

FIRST STAGE: REGISTRATION OF A LIMITED LIABILITY COMPANY

A private security guard company must be registered at the Corporate Affairs Commission (CAC) as a limited liability company. The company should have a minimum share capital of N10,000,000.00 (Ten Million Naira) with the object being the provision of private security services.

Requirements for the registration at the Corporate Affairs Commission.

  1. Name: Two proposed names stipulating the preferred name and an Alternative name.
  2. Address: The head office of the company and branch offices (if any).
  3. Share capital: The share capital and shareholding formula among the shareholders.
  4. Directors: Particulars of at least three (3) directors. This includes their phone numbers, email address, residential address, passport photograph, copies of their identity card, which could be National passport/National Identity card/Driver’s licence or voters card.

Note: One of the directors of the company must be a retired military or paramilitary personnel, from the rank of Major or Commissioner, respectively. No foreigner should be a Director.

  1. Secretary: Particulars of the Company secretary, passport photograph and means of identification.
  2. Shareholders: Particulars of shareholders who will be the first subscribers of the company.
  3. Memorandum and Articles of Association (MEMART): The CAC has a generic MEMART for new companies to adopt. However, due to the peculiarities involved in setting up a private security company, particularly some clauses to be included in the Articles, it is advisable to have a Legal Practitioner draft one.
  4. Fees: Depending on the share capital, the applicant will pay filing fees to the CAC and Stamp Duties to the Federal Inland Revenue Service (FIRS). The applicant should also budget for Professional fees for the Legal Practitioner (CAC Accredited Agent) who would assist with the entire process.

Where all these requirements are in place, statutory CAC forms will be filled online and the company will be duly registered.

The second stage would be to obtain a Private Security Licence from the NSCDC.

SECOND STAGE: REGISTRATION OF THE COMPANY WITH THE NSCDC

Before a licence is granted to a registered private security company to operate, the company must register with the NSCDC. The requirements for a registered company to register with the NSCDC in order to obtain a private security licence have been spelt out by the NSCDC. They include:

  • Application for private guard licence addressed to the Commandant General of the NSCDC.
  • Evidence of company registration with a minimum of N10,000,000 authorized share capital and a minimum of 3 directors.
  • Certified True Copies of the Memorandum and Article of Association.
  • Photocopies of Certificate of Incorporation.
  • Tax Clearance Certificate.
  • Statement of account from the Bank.
  • Letter from a Legal Adviser.
  • Letter from an Auditor.
  • Letter from bankers.
  • Proposed training program.
  • Proposed salary structure.
  • Veterinary certificate (optional). This applies if there would be use of security animals.
  • Personal History Statement (PHS) forms at One Hundred Thousand Naira (N100,000) only. All directors must obtain one. PHS form must be adequately filled by the Directors stating ‘Nil’ or ‘Not Applicable’ at portions they do not have answers to, and no column should be left unfill
  • Two (2) copies of Academic credentials of directors to be attached with PHS form.
  • Eight (8) passport photographs for each of the Directors.
  • Eight (8) full photographs (postcard 5 x7 inches) of each of the Directors with a white background, with five fingers print and signature signed at the back of the postcard (photograph) in the presence of Nigeria Security and Civil Defence Corps Officers.
  • Photocopy of the signature page of the Directors in the international passport or National ID Card or Driver’s Licence.
  • Attestation letters from 3 referees for each Directors.
  • One uniform sample (Complete set-shoes, clothes, cap) with a photograph of a guard in Uniform (2 copies). All uniforms and accoutrement must not have the semblance of any government agency or any other Private Guard Companies.
  • Application fee of N500,000.00 (Five Hundred Thousand Naira only).

All the above requirements must be complete before the NSCDC can assess the application for onward forwarding to the Presidency.

THIRD STAGE: OBTAINING A PRIVATE SECURITY LICENCE

The requirements in stage two above will be presented by the NSCDC to the Presidency for a final check and clearance of all the directors.

A letter of security clearance will be issued to NSCDC from the Presidency and the company will be invited to pay for the licence fees.

There are two categories of licence for private security guard companies.

THE LICENCE CATEGORIES

Category A: Under this category, the company can have up to 3000 guards. The Licence fee is N3,000,000 (Three Million Naira only).

Category B: Under this category, the company can have up to 500 guards. The Licence fee is N2,500,000 (Two Million, Five Hundred Thousand Naira only).

When the payment for licence under any of the categories is completed and the Commandant General of the NSCDC recommends the company, a licence may be approved by the Ministry and issued to the company.

UNDERSTANDING THE LICENSING AUTHORITY

By virtue of Section 2(1) of the Private Guard Companies Act, (PGC Act) an application for licence is made in writing through the licensing authority to the Minister of Internal Affairs. Section 3 of the Act authorizes the Minister to grant a licence only if he is satisfied that the grant is justified, having regard to national security and public interest.

At present, operations of private security guard companies are handled through the Ministry of Interior. The Ministry achieves this through the NSCDC. The NSCDC is required to recommend the registration of private guard companies to the Ministry by virtue of Section 3 of the NSCDC Act.

In order to achieve effectiveness in its duties, the NSCDC operates through its Private Guards Companies Department.

It is pertinent for Applicants for licence to know that it is only the authorities listed above that are involved in the licensing process. Applicants should therefore beware of fraudulent individuals.

RENEWAL OF A LICENCE

After the initial issuance of a licence to the security company, the company will be required to renew the licence three months before the expiration of the licence. (Section 11 of the PGC Act).

Section 11 (2) provides that “where the holder of a licence fails to renew such licence within the specified period, the licence shall stand revoked upon its expiry and such holder shall thereupon cease to operate as a private guard company”.

Requirements of renewal

The requirements for the renewal of a licence are as follows:

  1. Application Letter for Renewal of Operational Licence.
  2. Last letter of Renewal or Copy of Licence.
  3. Annual Performance Report (Report of activities of Company in the immediate preceding year).
  4. Staff Return (Staff list, Designation and Salaries).
  5. Current Tax Clearance Certificate.
  6. Current Statement of Audited Account of the Company.
  7. Evidence of Payment for renewal of the licence. The payment must be made into a designated Bank Account.

REGULATORY COMPLIANCE ISSUES FOR PRIVATE SECURITY COMPANIES

By the provisions of the PGC Act, private security companies are expected to comply strictly with all requirements of the law or risk revocation/withdrawal of their licence.

The following are expected of all private security guard companies:

  1. Renewal of licence: Licence to operate a private security company must be renewed promptly. It is prohibited for a Company to operate with an expired licence.
  2. Control and Administration: Part 2 of the PGC Act provides that every company shall keep complete records of its activities including all persons employed from time to time in carrying on the business of the company and make such records available to the regulatory authority whenever requested by the Ministry for inspection. Also, it prohibits private security companies and their personnel from bearing firearms or ammunition in the course of their duties and insists that their training syllabus and instructions must be approved for use by the Minister.
  3. Prohibited activities and offences: Part 3 of the PGC Act provides a list of prohibited activities for PSCs. The prohibited activities include:
  4. Acting as debt collectors, police officers, or “private detectives”.
  5. Divulging to outsiders, any information acquired in the course of duty.
  6. Providing false information for the purpose of securing approval.
  7. Acting as employee of any company that has not been licensed.
  8. Improper dressing. Failure to carry identity card while on duty or wearing, carrying, or bearing any article that is prohibited is an offence.
  9. Advertising business without specifying the name and address of the company as appearing in the licence.
  10. Selling, disposing or renting the company’s licence, approval or identity cards.
  11. Unlawful entry into any premises by employees of the company.
  12. Misrepresentation of facts, inducement or representation of false, misleading and deceptive statements.
  13. It is prohibited for a private security company to evade tax. Before a licence is renewed, the Company must present their current tax clearance certificate.

CONCLUSION

Registering and running a private security company in Nigeria demands strict compliance with the laid down rules and regulations. The slightest departure from the established regulations could lead to the deregistration of the company or revocation of licence to operate. Therefore, it is strongly advisable for such companies to retain the services of a legal practitioner to assist them with issues of regulatory compliance and filling of annual returns/report with the appropriate agencies.

 Grace Kalu, Esq. can be reached via the email: grace.kalu@harlemsolicitors.com


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