Starting a Security Company in Michigan | A Step-by-Step Guide


Steve Bennett
Steve Bennett
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Michigan Security Company

Starting a security company can be a lucrative business opportunity in Michigan, especially in today’s world, where the demand for security services is rising. However, Michigan requires careful planning, a thorough understanding of the industry, and diligent execution to ensure success. This article will provide a comprehensive guide on how to Start a Security Company in Michigan and help you navigate the various steps involved in setting up your own Limited Liability Company.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Michigan security company, all the steps in this article must guide you.

What is a Security Company in Michigan

A security company in Michigan is a business organization providing varying protection services to individuals and other businesses. These services can range from personal protection, akin to bodyguard services, to security systems for large corporations. Such companies aim to safeguard their clients’ assets by mitigating potential threats and breaches. State laws regulate them; they must obtain appropriate licenses and certifications before starting their operations.

To start a security company in Michigan, one may form a Limited Liability Company (LLC). Setting up an LLC in Michigan adds credibility to the business, protects personal assets, and often simplifies tax filing processes. With an LLC, the company’s assets and liabilities are separate from those of its owners. Therefore, the owner’s personal property cannot cover the company’s debts.

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How to Start a Security Company in Michigan

To form an LLC for a security company, there are various steps you need to be aware of, especially if you will form it in Lansing. Here are the necessary steps and proper guidelines for starting a security company. 

Step1: Research the Market and Competition

Before starting a security company, studying the market and competition in Michigan is essential. This will give you a better understanding of the existing security companies, their services, and their target clients. You can use various resources such as the internet, local business directories, and networking with security professionals in your area.

While researching the market, focus on identifying the demand for various security services, such as armed or unarmed security guards, alarm monitoring, and security systems installation. This will help you determine the type of services your company will offer and the target audience.

Step 2: Develop a Business Plan

A well-thought-out business plan is crucial for starting a security company in Michigan. The business plan should outline your company’s goals, target market, services, marketing strategies, and financial projections. It should also include an analysis of the competition and potential challenges your company might face.

A solid business plan will help you stay organized and focused on your objectives and will also be required when seeking financing or investment for your security company.

Step 3. Choose a Business Structure

When starting a security company in Michigan, you must choose a business structure that best suits your needs and meets the legal requirements. Here are the most common business structures to consider:

Sole Proprietorship

This is the simplest business structure, where you, as the owner, have full control over the business and are personally responsible for all debts and liabilities. This may be suitable for small security businesses with minimal risk exposure.

Partnership

Starting a limited partnership or general partnership in Michigan is also an ideal business structure since it is owned by two or more individuals who share the profits, losses, and responsibilities. This can be a good option if you’re starting a security company with a partner and want to share decision-making and financial responsibilities.

Limited Liability Company (LLC)

An LLC combines a corporation’s and a partnership’s benefits. Owners, called members, have limited personal liability for the company’s debts and actions while also enjoying flexible management options. This is a popular choice for small to medium-sized security companies, as it provides some protection for personal assets.

Corporation

A corporation is a separate legal entity owned by shareholders. It provides the most protection from personal liability but also involves more regulations, paperwork, and costs to set up and maintain. Corporations in Michigan are typically more suitable for larger security companies with multiple employees and substantial assets.

When starting a security company in Michigan, consult with a Business Attorney in Michigan to determine the most suitable business structure for your specific needs and goals. We recommend to start an LLC since it offers limited liability protection for your business.

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Step 4: Register Your Business

Once you’ve chosen a business structure, register your security company with the Michigan Secretary of State. This typically involves filing the necessary paperwork and paying a registration fee. Here are the things you need to apply for or hire to register your Michigan security company.

Choose a Name

Choosing a name for your Michigan security company is important in establishing your brand identity and reflecting your services. Here are some tips and suggestions to help you choose a name:

  • Keep it Simple and Memorable: Choose a name that is easy to pronounce, spell, and remember. This will make it easier for potential clients to find and remember your company.
  • Incorporate Keywords: Including words related to security, safety, or protection in your company name can help potential clients understand what services you provide. Some examples of keywords are “guard,” “patrol,” or “surveillance.”
  • Reflect on Your Niche: If your Michigan security company focuses on a specific niche, such as residential, commercial, or event security, consider incorporating this into your company name.
  • Consider Using Your Location: Incorporating the name of your Michigan or a specific city or region can help potential clients identify your company as a local business and establish a connection to your service area.
  • Check for Availability: Before settling on a name, ensure it is not already used by another security company in your area or registered as a trademark. You can check the availability of a name by searching the Michigan Department of Licensing and Regulatory Affairs‘s website and the United States Patent and Trademark Office (USPTO) website.

Based on these tips, here are some sample names for a security company in Michigan:

  1. Michigan SecureGuard Services
  2. Michigan Sentinel Protection
  3. SafeShield Security Michigan
  4. Michigan Premier Patrol
  5. Michigan Homeland Security Solutions
  6. Michigan Watchtower Security Services

Remember to choose a name that reflects your company’s values, services, and target market while being unique and memorable. There is a complete guide on Michigan Business Name Search for you to have a proper Michigan security company name. 

In Michigan, if you do not wish to file your security company right away but want to hold the name that you have decided on, then you can reserve your security company name for 6 months. You must file a name reservation application with the Michigan Secretary of State to keep the name. 

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for Michigan DBA (doing business as)

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Hire a Resident Agent

In forming a security company in Michigan, the role of a Resident Agent is crucial for ensuring compliance with state regulations and maintaining a line of communication with the state government. A Resident Agent is a person or entity responsible for receiving important legal documents, and government notices on behalf of your security company. Here are some key roles and responsibilities of a Resident Agent in Michigan:

  • Legal Document Reception: A Resident Agent receives legal documents, including lawsuits (also known as service of process), subpoenas, and other official correspondence related to your business. They promptly inform you of legal actions or requirements affecting your security company.
  • Government Correspondence: A Resident Agent receives official notices, correspondence, and documentation from the state government, such as Annual Report notifications, tax notices, and other compliance-related information.
  • Compliance Assistance: A Resident Agent will help your security company maintain good standing in Michigan by promptly notifying you of legal and compliance-related matters. This can be crucial for avoiding penalties, fines, or even the dissolution of your business.
  • Maintaining a Physical Address: A Resident Agent must have a physical street address (not a P.O. Box) within Michigan, where they are available during normal business hours to receive legal documents and government notices. This is particularly important for businesses that do not have a physical office location in the state or for out-of-state business owners.
  • Record-Keeping: A Resident Agent may also offer additional services, such as maintaining and organizing your business records, tracking filing deadlines, and assisting with annual report submissions. 

You can serve as your Resident Agent, appoint a friend or family member, or hire the Best Michigan Resident Agent Services.

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File The Articles of Organization 

If you form an LLC for your security company, you must file the Michigan Articles of Organization, which costs $50. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

Create an Operating Agreement

An Operating Agreement in Michigan is a legal document outlining the ownership structure, management, and operating procedures of a Limited Liability Company (LLC). While not always required by law, having an operating agreement is highly recommended for security companies in Michigan to ensure clear communication and expectations among the owners.

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Obtain an Employer Identification Number

You must first obtain an Employer identification number (EIN) in Michigan from the IRS if you will open a bank account or hire an employee for your Michigan security company. 

The application of an EIN in Michigan can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

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Step 5: Obtain Licenses and Permits

Starting a security company in Michigan requires obtaining specific licenses and permits. These may vary depending on your location and the services your company will offer. Some of the common licenses and permits needed for a security company include the following:

  • Security Company License: This mandatory license allows you to operate a security company in Michigan. The requirements for obtaining this license may vary depending on your location but generally include submitting an application, paying a fee, and passing a background check. The cost of filing a security company license ranges from $50 – $300 (depending on the license type).
  • Security Guard Licenses: If your company employs security guards, they must be licensed in Michigan. This typically involves completing a state-approved training program, passing a background check, and paying a licensing fee.
  • Firearms Permit: If your company provides armed security services, you and your employees must obtain firearms permits. The requirements for obtaining a firearms permit in Michigan may include completing a training course, passing a background check, and paying a fee.
  • Business License: Michigan may require a Business License. The business license fee in Michigan ranges from $50 – $300.

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Step 6: Get Insured

Insurance is crucial to starting a security company in Michigan. You’ll need to obtain various types of insurance to protect your business and employees, including:

  • General Liability Insurance: To protect your company from claims of bodily injury, property damage, and personal injury resulting from your services.
  • Workers’ Compensation Insurance: To cover medical expenses and lost wages for employees who are injured on the job.
  • Professional Liability Insurance: To protect your company from claims of negligence or failure to perform professional duties.
  • Commercial Auto Insurance: If your company uses vehicles for business, you’ll need commercial auto insurance to cover accidents or damage.

You can apply for Michigan Business Insurance for your Michigan security company. 

Step 7: Hire and Train Employees

Hiring and training qualified employees is essential for the success of your security company in Michigan. When hiring security guards, look for individuals with previous security experience, military or law enforcement backgrounds, and strong communication skills.

Once you’ve hired your employees, you must provide them with the necessary training to perform their duties effectively. This may include state-approved security guard training programs, firearms training, specialized first aid, crisis management, and customer service courses. In addition, before hiring and training employees for your Michigan security company, you must obtain an EIN with the Internal Revenue Service.

Step 8: Invest in Equipment and Technology

Your Michigan company must invest in high-quality equipment and technology to provide top-notch security services. Some essential equipment for a security company in Michigan includes:

  • Uniforms and badges for your security guards
  • Firearms and non-lethal weapons (e.g., pepper spray, stun guns)
  • Security vehicles
  • Surveillance cameras and alarm systems
  • Communication devices, such as radios or smartphones
  • Computer hardware and software for managing your business operations

Step 9: Market Your Security Company

Effective marketing is essential for attracting clients and growing your security company in Michigan. Some marketing strategies include creating a professional website to showcase your services and expertise; printing and distributing business cards, brochures, and flyers; advertising online, in local newspapers, and on radio or television; offering discounts or promotions to attract new clients; networking with local business owners and community organizations; and participating in trade shows and industry events.

Step 10: Provide Excellent Customer Service

Providing excellent customer service is crucial for the success of your security company in Michigan. Strive to meet or exceed your client’s expectations by providing high-quality security services, addressing their concerns promptly, and maintaining open communication. You’ll build a strong reputation and encourage repeat business and referrals by consistently delivering exceptional customer service.

FAQs

What do I need to do to legally start a security company in Michigan?
You need to follow the Michigan licensure requirements for security companies.
How do I obtain a license to start a security company in Michigan?
You need to apply with the Michigan Department of Licensing and Regulatory Affairs.
Does Michigan require a certain level of insurance for my security company?
Yes, the state requires that security companies hold liability insurance.
Are there any training requirements for starting a security company in Michigan?
Yes, security company personnel must complete security officer training and carry a valid license.
Can I operate a security company in Michigan without a proper license?
No, operating a security company without proper licensure is illegal in Michigan.
Does Michigan require a national background check before issuing a security company license?
Yes, a national background check is required.
How long does it take to obtain a security company license in Michigan?
The process typically takes between six and eight weeks.
How many employees do I need to have to start a security company in Michigan?
There are no strict employee requirements, but most security companies have at least a few employees.
What are the fees associated with obtaining a security company license in Michigan?
The fees vary depending on the type and size of the security company, but the application fee is $5,000.
Does Michigan require ongoing training or continuing education for security company personnel?
Yes, security personnel are required to complete yearly training and maintain their licenses.
Are there any zoning restrictions I need to consider when starting a security company in Michigan?
Zoning laws vary by city and municipality, so it is important to research local laws.
Can my security company employees work armed in Michigan?
Yes, some security company personnel may work in an armed capacity, depending on their training and licensure.
What type of security services can my company offer in Michigan?
Security companies can offer a range of services, such as protection for events, commercial buildings, and individual clients.
Can I start a security company from my home in Michigan?
It is possible, but may be subject to certain zoning restrictions and registration requirements.
Can a security company in Michigan offer private investigation services as well?
Some security companies are licensed to offer private investigation services, but this is a separate licensure process.
Is there a limit to the number of security companies that can operate in Michigan?
There is no legal limit, but the market may dictate the number of successful security companies in an area.
Are there any tax incentives for starting a security company in Michigan?
Michigan offers a range of tax incentives to businesses, but the availability and amount will vary.
Are there any grants or loans available to help with starting a security company in Michigan?
Michigan offers a range of small business grants and loans, but eligibility and availability will vary.
What type of surveillance and monitoring equipment can a security company use in Michigan?
There are no strict regulations, but it is important that any equipment used is operated within legal guidelines.
Can my security company partner with law enforcement in Michigan?
Yes, many security companies partner with local law enforcement to deter crime and ensure public safety.
Are there any lobbying or advocacy groups for security companies in Michigan?
Organizations like the Security Industry Association and MIASSP advocate for the security industry in Michigan.
Is there a demand for security companies in Michigan?
The demand for security services varies by industry and location, but some places like large cities may have a strong demand.
What is the minimum age for security company personnel in Michigan?
The minimum age is 18 for security guard training and 21 for armed security guard training.
Can a security company work with other industries, such as real estate or retail, in Michigan?
Yes, security companies often work with other industries to provide security services.
What is the average salary for security personnel in Michigan?
The average salary varies depending on the position and industry, but may range from $25,000 to $80,000.
Are there any restrictions on the hours that security company employees can work in Michigan?
There are no state-wide restrictions on hours, but labor laws and contracts should be followed.
Is it possible to franchise a security company in Michigan?
Yes, franchising can be an option for expanding a security company in Michigan.
Does Michigan require security companies to maintain a certain level of liability insurance?
Yes, security companies must maintain liability insurance to protect themselves and their clients.
Can my security company offer personal protection services in Michigan?
Yes, some security companies offer personal protection services as part of their offerings.
What permits and licenses are required to start a security company in Michigan?
You will need to obtain a Private Security Guard Company License through the Michigan Department of Licensing and Regulatory Affairs.
How much does it cost to obtain a Private Security Guard Company License in Michigan?
The licensing fee for a Private Security Guard Company License in Michigan is $750.
Are there any other fees associated with starting a security company in Michigan?
Yes, you may need to pay a fingerprinting fee and a fee to submit a surety bond.
How long does it take to get a Private Security Guard Company License in Michigan?
The licensing process can take several weeks to months, depending on various factors, including the completeness of your application and any additional information required by the licensing board.
What kind of training is required to start a security business in Michigan?
Security professionals in Michigan are required to complete a certain amount of training before being licensed and working in the field.
How many hours of training are required to get a Michigan Security Guard License?
At least 40 hours of training are required for unarmed Security Guard licensing in Michigan.
What is the renewal fee for a Michigan Private Security Guard Company License?
The renewal fee for a Michigan Private Security Guard Company License is $500.
Can I start a security company in Michigan with a felony conviction on my record?
Michigan law prohibits individuals with certain felony convictions from getting a Private Security Guard Company License.
What kind of insurance do I need to start a security company in Michigan?
Liability insurance and Workers’ Compensation insurance are typically required for a security company in Michigan.
Can a security company operate statewide in Michigan?
Yes, a security company can operate statewide in Michigan, as long as it obtains the appropriate licenses and permits.
How do I find clients for my Michigan security company?
You may start by networking with local businesses, contacting trade associations or chambers of commerce, and leveraging digital marketing platforms.
Can my Michigan security company use surveillance cameras to monitor my clients’ premises?
Yes, as long as you follow certain Michigan laws and regulations regarding the use of surveillance cameras.
What are the requirements for an individual security guard’s license in Michigan?
A security guard needs to complete 40 hours of training, apply for an individual security guard’s license, and meet other criteria.
Can a non-resident of Michigan start a security company in the state?
Yes, non-residents of Michigan can start a security company in the state as long as they obtain the appropriate licenses and permits.
Can I use lethal force to protect my clients as a security guard or company in Michigan?
A security guard cannot use lethal force unless justified and otherwise lawful under Michigan law.
What firearms training is required for private security guards in Michigan?
Michigan laws do not require firing-range firearms training, but to be armed, private security guards must have at least 8 hours of firearms classroom training and 6 hours of firearms range training.
How many levels of security activities are there in Michigan?
There are four protected levels of security activities, and businesses seeking distinguished levels of security must pass different acts of accreditation.
Where can I find information on any legal requirements surrounding training to start a security company in Michigan?
The Michigan-Based Security Guard Training School is available.
What are the duties of a security officer in Michigan?
Duties include safeguarding and surveying facilities, providing or obtaining evidence, security consulting and protecting people.
What are Class 121 or 25 certifications relevant to in security services in Michigan?
While Class 121 relates to weapon certification, Class 755 is used to describe specialties required for private detective work, and Class 25 pistol certification is needed for armed private detective work.
Can employers perform polygraph tests by Michigan law in reality with employment candidates/applicants as part of the screening?
No, for employment-related reasons within Michigan, polygraphs are generally not permitted.
Will business owners of other similar firms throughout Michigan be my rival companies and how can I ward off my business competition to survive?
Some firms may be competition. Proper research into common strategies to pick up market niches, scope their success histories, offer competitive material and maintain a good reputation would help counter.
What is the operation zone limit as a private security company in Michigan?
This may be located beyond metro areas and counts both suburban, major city and exurbs among remote areas that professional service providers, as an instance, conducts private security services.
How many guards do I have to put on my payroll before investing sensibly in MI?
The precise staffing needs of a fledgling dynamic sector in Michigan vary with the sort of statutory license schedule you prefer, which specialties are appropriate and your client sector profile.
What rights do Michigan law grants me as a certified facility protection officer?
While individual circumstances may vary, a facility security firm may maintain rights such as access control points, surveillance and patrol assignments, and interactions with site guests where reasonable.
Do Michigan’s laws require taking fingerprints during the licensing application process?
A fingerprint background analysis is an essential part of the licensing application process.
How may incidents involving firearms used by security guards occur in regulation?
Only intelligent legal responses are necessary in Michigan to guarantee clients and workers hope despite firearm incidents.
Is substance treatment legal in the classification of disabled workers in Michigan private security companies?
Substance addiction causes discriminatory treatment for staff of a company covering individuals with questionable lifestyles, frequent absence from work, or other behavioral issues, making it possible to neutralize employee pressure.
Do Michigan state laws regulate security alarm firms and electronic security technology companies cohesively?
Yes, Michigan’s laws controlling the operation of CCTV and alarm technology are cohesive where any basic problems that arise in the installation or use of products by these practitioners would require certification.

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Conclusion

Starting a security company in Michigan can be rewarding and profitable. By following the steps outlined in this guide, you’ll be well on your way to establishing a successful security business in your area. Remember to be patient and persistent, as building your client base and reputation may take time. Your security company can thrive in the competitive Michigan market with dedication and hard work.

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