To start a security company in Texas, the licenses you need begin with a Class B Security Contractor License from the Texas Department of Public Safety (DPS), issued under Chapter 1702 of the Texas Occupations Code. That one license authorizes the company to provide guard services, but DPS will not issue it until you have designated a Qualified Manager, bound a general liability policy that meets statutory minimums, and set up the business entity itself. Once the company is licensed, every officer you put on a post needs their own DPS registration or commission.
The Class B Security Contractor License
The Class B license is the category that authorizes a company to provide security guard services, both armed and unarmed. Chapter 1702 defines several license classes: Class A covers investigations companies, Class B covers security services contractors, and separate categories cover alarm systems, armored transportation, and locksmiths. If your company will only provide guard services, Class B is the one you need. If you also plan to offer investigations or install alarm systems, you need the corresponding additional license for each service line.
A company cannot hold a Class B license on its own. The license attaches to a Qualified Manager, and DPS will not issue it without that person named on the application.
The Qualified Manager Requirement
The Qualified Manager (QM) is the individual who takes personal responsibility for supervising the company’s security operations. For many small startups the owner serves as the QM, but the role can be filled by a hired employee who meets the qualifications.
The QM must have at least three years of verifiable experience in the security field, with at least one of those years in a supervisory or managerial role. They must pass a state-administered exam and clear a fingerprint-based criminal history check.
Baseline eligibility, which applies to company license applicants and to individual officers, requires that the person be at least 18 and not:
- Currently charged with or convicted of a Class A or Class B misdemeanor or any felony that DPS rule treats as disqualifying.
- Found by a court to be mentally incompetent due to mental defect or disease, unless competency has been restored.
- Dishonorably discharged from the military, or discharged under other conditions the commission determines are prohibitive.
- Required to register as a sex offender in Texas or any other state.
DPS rules set waiting periods for criminal history. A disqualifying Class A misdemeanor conviction bars an applicant for five years from the conviction date, and felony convictions carry longer disqualification periods.1State of Texas. Texas Occupations Code Chapter 1702 – Private Security If your intended QM has any criminal history, check the specific timelines in 37 Texas Administrative Code Section 35.4 before investing in the application.
Insurance You Must Have Before You Apply
DPS will not accept your application without a general liability policy already in force. The policy must be countersigned by a Texas-licensed insurance agent and meet these minimum limits:
- $100,000 per occurrence for bodily injury and property damage
- $50,000 per occurrence for personal injury
- $200,000 aggregate for all occurrences
You submit a certificate of insurance with the application.2State of Texas. Texas Occupations Code Section 1702.124 – Insurance Requirement
These are statutory minimums, and they are low for the security industry. A single incident involving a guard using force, restraining someone, or failing to prevent a crime on a client’s property can generate claims well beyond $100,000. Standard general liability policies also frequently exclude assault and battery and firearms incidents, which are exactly the scenarios most likely to produce lawsuits against a security company. When shopping for coverage, ask specifically about those exclusions and whether they can be added back through endorsements.
Applying Through DPS: Process, Fees, and Timeline
Applications go through the Texas Online Private Security (TOPS) portal. You submit information about the business entity, its owners, and the Qualified Manager’s background. The initial fee for a Class B license is $412, which breaks down to a $400 license fee plus a $12 pocket card fee.3Department of Public Safety. Private Security Fee Schedule
After submission, DPS verifies the information, reviews background check results, and confirms insurance coverage. Expect six to eight weeks for the review. During that window you cannot operate or advertise security guard services. Providing guard services without a Class B license, or using officers who are not properly registered or commissioned, violates Chapter 1702 and can bring both administrative and criminal penalties against the company and the individuals involved.
The most common reasons applications stall are incomplete background documentation for the QM, insurance certificates that do not match the statutory minimums, and criminal history that falls within the disqualification windows. If DPS requests additional information, parts of the review clock restart, so it pays to get the package right the first time.
Licensing Each Officer You Hire
Your Class B license lets the company operate; it does not cover the people doing the work. Every officer you hire must be individually registered or commissioned with DPS before working a post, and the employer sponsors the application through TOPS.
Unarmed (Non-Commissioned) Officers
An unarmed officer needs a non-commissioned registration. The officer must complete a Level II training course of at least 30 hours covering legal authority, emergency procedures, and report writing, then pass the course exam.4Department of Public Safety. Training and Continuing Education The employer-sponsored registration costs $37 total, covering the license, pocket card, and subscription fee.3Department of Public Safety. Private Security Fee Schedule
Armed (Commissioned) Officers
Armed officers face significantly more. They must complete a Level III course of at least 45 hours that includes firearms proficiency testing, demonstrate handgun marksmanship competency to the firearms training instructor’s satisfaction, and complete the Minnesota Multiphasic Personality Inventory (MMPI) psychological screening.5State of Texas. Texas Occupations Code Chapter 1702 – Section 1702.163 The firearms proficiency demonstration must be completed within 90 days of the application date.4Department of Public Safety. Training and Continuing Education The total fee for a commissioned officer license is $57.3Department of Public Safety. Private Security Fee Schedule
Federal law independently bars certain people from possessing firearms. Under 18 U.S.C. ยง 922, a person cannot possess a firearm if they have been convicted of a crime punishable by more than one year of imprisonment, convicted of a misdemeanor crime of domestic violence, subject to certain domestic protective orders, adjudicated as mentally defective, or dishonorably discharged from the military, among other disqualifiers.6Office of the Law Revision Counsel. 18 USC 922 – Unlawful Acts Texas statute mirrors this by making anyone disqualified by state or federal law from owning or possessing a firearm ineligible for a security officer commission. Run every armed candidate through both state and federal disqualifier lists before you pay for Level III training.
Pocket Cards
Commissioned and non-commissioned officers both receive a pocket card from DPS. Commissioned officers must carry the card on duty and when traveling to and from assignments, and must present it on request to any peace officer or DPS representative. The card cannot be altered, and the officer cannot perform security duties for any employer other than the one reflected in DPS records.
Business Formation, Local Permits, and Federal Registrations
The DPS license is separate from forming the business itself. Before or during the DPS application, register your company with the Texas Secretary of State as an LLC, corporation, or other entity. Most security company owners choose an LLC for liability protection, though the right structure depends on your situation.
Texas has no single statewide general business license, but most cities and counties have their own permit or registration requirements. Contact the city and county clerk wherever you plan to operate. This is easy to overlook when the DPS application is consuming your attention, and operating without required local permits can bring fines.
Before hiring your first officer, obtain a Federal Employer Identification Number (EIN) from the IRS. The application is free on the IRS website and the number issues immediately upon online approval. Form the business entity with the Texas Secretary of State first; the IRS requires the entity to exist before it will issue the EIN.7Internal Revenue Service. Get an Employer Identification Number As an employer you will withhold income tax, Social Security, and Medicare from wages and file Form 941 quarterly, owe federal unemployment tax reported annually on Form 940, and make federal deposits electronically through EFTPS. You must also complete Form I-9 for every employee to verify identity and work authorization, and retain it for three years after the hire date or one year after employment ends, whichever is later.8U.S. Citizenship and Immigration Services. Employment Eligibility Verification
Keeping the License Alive: Renewal and Continuing Education
A Class B company license expires two years from the date of issuance. DPS sends a written notice at least 30 days before expiration, but the duty to renew on time is yours. The renewal fee is $412, the same as the original. Penalties climb once you miss the date:
- Expired 90 days or less: 1.5 times the normal fee ($612 total).
- Expired more than 90 days but less than one year: double the normal fee ($812 total).
- Expired one year or more: the license cannot be renewed and you must apply for a new one from scratch.
While the license is expired, you cannot legally provide security services.9State of Texas. Texas Occupations Code Chapter 1702 – Private Security
Individual officers have continuing education obligations at renewal. Owners who hold individual licenses solely as owners must complete 8 hours of continuing education per renewal cycle: 7 hours in subject matter related to the type of security service provided and 1 hour of ethics training.10Cornell Law Institute. 37 Texas Administrative Code Section 35.161 – Continuing Education Requirements Proof of completion stays in the employee’s personnel file. Do not wait until the deadline to schedule it. Course availability can be limited, and an expired individual license means that officer cannot work.