How to Start a Security Guard Company in Texas: DPS Commissioned and Noncommissioned Officers

Starting a security guard company in Texas requires navigating state licensing, industry certifications, and specific insurance requirements. This guide walks you through the exact steps to form a legitimate security services business under Texas Department of Public Safety (DPS) oversight.

Materials and Prerequisites You Will Need

Before you apply for licensing, gather these essentials:

• Business entity formation documents: Certificate of Formation for an LLC (Form 205) or a corporation (Form 201). (Cost: $300 for LLC filing with Texas Secretary of State)
• Employer Identification Number (EIN): Apply free at IRS.gov; you'll need this for hiring and tax reporting.
• General liability insurance certificate: Minimum coverage of $100,000 per occurrence, $50,000 for personal injury, and $200,000 aggregate (required by Texas Occupations Code 1702.124)
• Proof of experience and identity: Resumes or employment records showing 3 years of experience in private security and 1 year in a managerial or supervisory role
• DPS application materials: Forms, fees, and exam preparation materials (check the Texas DPS Private Security Program website for current fee schedule and required documents)
• Texas sales tax permit: If you'll sell products (uniforms, equipment) or have taxable services (free from Comptroller; typically takes two to three weeks to process)
• Registered agent information: Name and physical Texas address of your registered agent (required for LLC or corporation)

Step-by-Step Process to Launch Your Texas Security Guard Company

Step 1: Form Your Business Entity

Decide whether you'll operate as an LLC, corporation, or sole proprietorship. An LLC or corporation protects your personal assets and is standard in the security industry. File your Certificate of Formation (LLC) or Certificate of Formation (corporation) with the Texas Secretary of State. You can file online through SOSDirect at direct.sos.state.tx.us for $300. Standard processing takes at least one business day; expedited options ($50 to $750) are available if you need faster approval.

Choose a business name that includes "Limited Liability Company," "LLC," "L.L.C.," "Limited Company," or "LC" (for LLCs). The name must be distinguishable from existing Texas business records. Call the Secretary of State at (512) 463-5555 to check preliminary name availability before filing.

Step 2: Apply for an Employer Identification Number (EIN) (Same day)

Visit IRS.gov/ein and apply online. You'll receive your EIN immediately, or apply by mail or phone if preferred. This is free and required to hire employees and open a business bank account.

Step 3: Secure General Liability Insurance

Contact commercial insurance brokers who specialize in private security. You must have general liability coverage in place before applying to the DPS. The mandatory minimums are $100,000 per occurrence, $50,000 for personal injury, and $200,000 aggregate. Quotes vary with your planned scope (number of officers, types of assignments, armed or unarmed focus). Get a certificate of insurance naming your company; you'll submit this with your DPS application.

Step 4: Verify Your Qualifications and Officer Certifications

Texas requires your company's representative (the person applying for the Class B license) to meet specific standards. You must be at least 21 years old, have 3 years of hands-on experience in private security or law enforcement, and have 1 year in a managerial or supervisory capacity.

For security officers on your staff, you must arrange training through DPS-approved providers:

• Noncommissioned (unarmed) officers: Complete Level II training and pass the Level II exam.
• Commissioned (armed) officers: Complete Level II, then Level III training (minimum 45 hours plus firearm proficiency demonstration). Six hours of continuing education required at license renewal.
• Personal protection officers: Complete Levels II, III, and IV. Level IV adds 15 additional hours.

Contact approved DPS training providers to schedule courses. Training time depends on course schedules and firearms range availability.

Step 5: Complete the DPS Class B License Application

Submit your application for a Class B Security Services Contractor License with the Texas Department of Public Safety Private Security Program. Class B covers guard services, alarm systems, armored car transport, courier services, electronic access control, and locksmith categories. (Note: Investigations are handled under Class A; alarm installation is a separate Class B specialty with its own individual license.)

Include with your application:

• Completed DPS application forms (visit the DPS website for current forms)
• Proof of your 3 years private security experience and 1 year supervisory experience
• Certificate of general liability insurance
• Background check authorization and any required fingerprinting
• DPS examination fee (check the DPS fee schedule for current amounts)
• Proof of EIN and business formation

You will be required to pass the DPS examination. The exam tests knowledge of Texas private security law (Occupations Code Title 10), ethical conduct, customer relations, and operational procedures. Study materials are available from the DPS. Processing time varies; contact the DPS Private Security Program directly for current timelines.

Step 6: Register for Texas Sales Tax

If you will sell taxable goods or services, obtain a sales and use tax permit from the Texas Comptroller of Public Accounts. This is free and typically processes in two to three weeks. Apply at comptroller.texas.gov/taxes/permit. Texas sales tax rate is 6.25 percent state tax; local taxes may apply.

Step 7: File Your Annual Tax Reporting (Ongoing, due May 15 each year)

Texas does not levy corporate income tax or personal income tax, but you are subject to the franchise tax, a privilege tax administered by the Comptroller. For the 2026 and 2027 report years, businesses with $2,650,000 or less in total revenue owe no franchise tax but must still file a Public Information Report by May 15 each year. Rates above the threshold are 0.375 percent for retail and wholesale businesses and 0.75 percent for all others. The report is filed with the Comptroller alongside any franchise tax payment. Learn more at comptroller.texas.gov/taxes.

Step 8: Obtain an Assumed Name Certificate (If Using a Trade Name)

If you operate under a name different from your legal business entity (for example, your LLC is named "Alpha Security LLC" but you market as "Guardian Security Services"), file an Assumed Name Certificate with the Texas Secretary of State for $25. This filing is not required if you use your official business name.

Tips and Common Mistakes to Avoid

• Don't skip insurance before applying for your DPS license. The DPS will not process your application without proof of the required general liability coverage in place.
• Verify officer certifications match your job openings. Armed positions require Level III or higher; many entry-level guard posts are noncommissioned (Level II only). Hiring the wrong certification level costs time and money.
• Start training recruitment early. DPS-approved training providers book up, especially for firearms courses. Plan ahead if you need multiple officers trained.
• Check the DPS fee schedule before budgeting. License renewal fees, exam fees, and application fees change; confirm current costs with the DPS to avoid surprises.
• Keep experience documentation organized. The DPS will verify your 3 years of security experience. Gather old employment letters, W-2s, or references early so the application doesn't stall.
• Maintain liability insurance continuously. Lapses in coverage can result in license suspension or revocation. Set up automatic renewal reminders.
• Understand the distinction between Class B and Class A. Guard companies are Class B; investigative services are Class A and require a separate license. Offering investigative work without the right license is illegal.
• Don't confuse alarm installation with guard services. Installing security alarms requires a separate Class B alarm installer license; offering installation services without this license violates state law.

Expected Results and Timeline

Total time depends on insurance, training availability, and DPS processing, so confirm current timelines with DPS. The main stages are:

• Business formation and EIN
• Insurance procurement
• Officer training (depends on course availability and how many officers you hire upfront)
• DPS application review and exam (varies by DPS processing volume)
• Sales tax registration (typically two to three weeks)

You can operate in parallel: submit your business formation and DPS application materials simultaneously, arrange training during the application review phase, and secure insurance at the outset. This overlap shortens total elapsed time.

Once licensed, you will be subject to DPS audit and compliance inspections. Officers must complete required continuing education annually or biennial (check current renewal rules with DPS). Maintain detailed records of all employee training, background checks, and on-the-job performance. Violations of the security licensing rules can result in fines, suspension, or license revocation.

Disclaimer

This article is informational only and does not constitute legal advice or tax advice. Texas private security licensing is governed by Occupations Code Title 10 and Texas Administrative Code Title 37, Part 1. Specific requirements, fees, and timelines are subject to change by the Texas Department of Public Safety. Before starting your security guard company, consult a Texas business attorney licensed to practice law in Texas and a CPA or tax professional familiar with Texas business formation and franchise tax requirements. The Texas Small Business Development Center Network (sbdctexas.org) and your local Small Business Administration office can also provide free or low-cost guidance.

Contact the Texas DPS Private Security Program directly for current licensing fees, exam schedules, training provider lists, and application procedures. Requirements change; verify all information with official state sources before investing time and capital.