How To Start A Security Company in Texas (2026 Guide)

Texas is one of the easier states in which to get a security company licensed, and one of the easier ones in which to quietly lose the licence afterwards. There is no surety bond. There is no state-mandated hour count for unarmed training. No city can make you buy a second permit on top of the state one.

What Texas does instead is load the entire application onto one person — the company representative — and then make you renew the company licence every single year rather than every two.

Here is the whole path, in the order the Department of Public Safety actually processes it.

The whole path, in order

Two steps stop everything behind them. Both involve people rather than paperwork, which is exactly why operators underestimate them.

1. 1

   Line up your company representative

   2–8 weeks

   Blocks everything downstream — start it early

   Identify the officer or 25 percent owner who will hold the role, then assemble employer letters proving three years of accumulated field experience and one year in a managerial or supervisory position. Every hour has to be verifiable by a prior employer. This is where applications stall, and no other step can compensate for it.

2. 2

   Form the entity with the Secretary of State

   1–3 business days

   A Texas Certificate of Formation filed online clears in days. Get the name exactly right before you go further — DPS matches your insurance certificate against its own record of your company name and address, and a mismatch is a silent rejection later.

3. 3

   Bind general liability and get the PSP-05 signed

   1–2 weeks

   Texas sets statutory minimums of $100,000 per occurrence for bodily injury and property damage, $50,000 for personal injury and $200,000 aggregate. The policy has to be countersigned by a Texas-licensed agent or placed through a resident surplus lines agent, and proof goes to DPS on form PSP-05.

4. 4

   File the company application in TOPS

   1 day to file

   Blocks everything downstream — start it early

   Everything goes through the online portal. Two traps live here: each document must be uploaded and classified individually rather than bundled into one PDF, and the application is deleted outright if payment is not submitted within 15 days of starting it.

5. 5

   Sit the company representative exam

   2–6 weeks after filing

   You cannot take this exam cold. DPS schedules it only once your application and fees are on file, then posts an invitation letter. It is open-book on Occupations Code Chapter 1702 and 37 TAC Chapter 35 — 50 questions, 70 percent to pass, and retakes are allowed within your 90-day application window.

6. 6

   Register your officers

   1–3 weeks per intake

   Unarmed officers cost $37 for a two-year registration plus $28.25 for prints, and their Level II training is delivered in-house by you rather than by an outside school. Armed officers are a much longer runway: 45 hours of Level III and a psychological inventory.

7. 7

   Diary the annual renewal from day one

   Ongoing

   The company licence expires twelve months after issue. Renewal opens 180 days early and closes one year after expiry, with $200 added at 91 days late and $400 beyond that. DPS will also refuse to process a renewal while your insurance shows lapsed in its database.

Step 1: Line Up Your Company Representative

Texas will not issue a Class B licence to a company that has nobody qualified to run it. Everything else on this page is administrative by comparison.

What Texas calls the qualifying person

The term "qualified manager" was retired on 1 September 2019. The role is now the company representative, and it has to be either an officer who oversees the regulated services or a partner or shareholder holding at least a 25 percent interest. An owner can hold it, and in a new company almost always does.

The representative must be at least 21. Every officer who oversees regulated services and every shareholder at or above 25 percent is also fingerprinted, screened, and holds an individual licence of their own at $57.

The experience test

For a guard company the representative needs:

• At least three years of accumulated employment experience in the field the company will be licensed in, and
• At least one year of that in a managerial or supervisory position

Note the word accumulated — the three years do not have to be consecutive. Note also that this is the guard standard specifically. The other Class B service categories, such as alarm or locksmith work, instead demand two consecutive years of full-time verifiable experience in each category you select.

The exam nobody can study for in advance

The company representative exam is open-book, covering Occupations Code Chapter 1702 and 37 TAC Chapter 35. Fifty true/false and multiple-choice questions, 70 percent to pass, $100 to re-sit.

The unusual part is the sequencing. You cannot book it before you apply. DPS schedules candidates only after the application and fees are received, then mails an invitation letter you have to bring to the exam along with photo ID and your application or company licence number. Retakes are permitted as often as the schedule allows, but only inside your 90-day application window.

Step 2: Form Your Legal Business Entity

A Certificate of Formation for a Texas LLC is $300 filed with the Secretary of State, and card payments carry a statutory 2.7 percent convenience fee. Online filings typically clear in one to three business days.

Why the entity name matters more than usual

DPS cross-checks the insured name and address on your insurance certificate against its own record of your company. An assumed name adopted after formation, or an address change never pushed to DPS, produces a rejection that looks like an insurance problem but is really a records problem.

Two ongoing obligations catch new Texas operators:

• There is no annual report to the Secretary of State in Texas, which lulls people into thinking there is nothing to file.
• There absolutely is something to file. Every LLC reports to the Texas Comptroller by 15 May each year. The no-tax-due threshold is $2,650,000 in total revenue for report years 2026 and 2027, so a new guard company owes nothing — but it must still file the Public Information Report. Missing it forfeits the entity's right to transact business in Texas, which in turn puts the DPS licence at risk.

Step 3: Bind Insurance — and Get the PSP-05 Right

Texas sets its liability minimums in statute rather than leaving them to the market:

• $100,000 per occurrence for bodily injury and property damage
• $50,000 per occurrence for personal injury
• $200,000 total aggregate for all occurrences

The policy must be countersigned by a Texas-licensed insurance agent, or placed as surplus lines through a resident Texas surplus lines agent. Proof is filed on DPS form PSP-05, and the licence is suspended immediately if the certificate lapses.

Step 4: File the Company Application in TOPS

Applications go through the Texas Online Private Security portal. The fee is $412 — $400 licence plus a $12 statutory subscription — and unusually for a licensing scheme, that single payment covers everything. There is no separate application fee and no separate issue fee. Texas charges the identical $412 on renewal.

Key tips for your TOPS filing

• Upload documents one at a time and classify each one. DPS states plainly that bundling causes processing delays. The insurance certificate, the experience letters and the identity documents are three separate uploads, not one merged PDF.
• Pay within 15 days. An application sitting unpaid for more than fifteen days is deleted and has to be re-entered from scratch.
• Select the Guard service category deliberately. One Class B fee covers whichever categories you tick, so a company doing guard and alarm work pays once — but the experience standard is tested per category.
• File online rather than on paper. DPS's own guidance is that a manual paper application may take four to eight weeks to process before anything else happens.

What it actually costs

Texas is inexpensive to enter and relentless about the annual renewal. The number that surprises people is not the size of the licence fee but its frequency: most states run company licences on two-year terms, and operators expanding into Texas mis-diarise this constantly.

Step 5: Register Your Officers — Armed and Unarmed

Texas splits sharply here, and the split is the single biggest scheduling decision you will make.

Unarmed officers are fast. Every non-commissioned security officer needs the Level II course, and here Texas is genuinely unusual: neither Chapter 1702 nor 37 TAC 35.141 sets an hour minimum for Level II. The rule states hour counts only for Level III and Level IV. More importantly, Level II may be delivered by the employing licensed company itself rather than only by a licensed training school — so there is no guard-card school gate of the kind California and Florida impose. You can stand up unarmed officers quickly once the company licence exists.

Non-commissioned officers are also expressly exempt from continuing education.

Armed officers are slow. The armed credential is a security officer commission, and it cannot be held independently of an employer. The path runs Level II, then Level III at a minimum of 45 hours including the course of fire and a written test, with firearm proficiency completed within 90 days of the application date.

Since House Bill 3424 took effect on 1 January 2024, three things changed and all of them cost time:

• Handgun proficiency and self-defence must be taught in person with an on-site DPS-approved instructor. Online-only Level III certificates are rejected.
• Self-defence tactics became part of Level III.
• Every original and renewing commissioned officer must complete the Minnesota Multiphasic Personality Inventory, a psychological test that no bordering state imposes on private armed guards.

Commissioned officers then need six hours of continuing education each renewal cycle through the Level III or IV renewal course.

Step 6: Go Live — and Win Work Locally

Once the Class B is issued you can contract. Texas gives you an advantage most states do not.

Occupations Code 1702.134 pre-empts local licensing. A company licence holder cannot be required to obtain a permit, franchise or licence from a municipality or county, pay another local fee or franchise tax, or post a local bond to perform work authorised under Chapter 1702. The only carve-outs a city keeps are a reasonable charge for using a central alarm installation in a police office, and inspection fees for a device causing five or more false alarms in twelve months. So Houston's and Dallas's alarm-permit ordinances are lawful and do apply to alarm work — a city guard-company permit does not exist.

Where the work is:

• Dallas–Fort Worth–Arlington — the densest concentration of corporate, logistics and data-centre contracts in the state.
• Greater Houston — petrochemical, port and hospital-campus demand, much of it armed.
• San Antonio–New Braunfels — a large military and federal-adjacent contracting base.
• Austin–Round Rock–Georgetown — tech campuses and event security, in a metro that has been growing faster than its incumbent providers.

Get the Google Business Profile up, start collecting reviews from the first account, and answer the phone. In this industry responsiveness wins more contracts than price does.

Step 7: Build Smart, Not Fast

Texas publishes what actually happens to licensed companies, and it is worth reading before you hire your first guard. In DPS's December 2025 company disciplinary report, the leading causes of administrative suspension were:

• Failing to complete required continuing education — 16 companies
• Failure to cooperate with an investigation or inspection — 6
• Failure to maintain records — 4
• Company representative failing to oversee the business — 4

Not one of those is about a guard doing something wrong on post. Every one is an administrative failure by the company, and every one is preventable with a calendar and a filing system.

Then there is the workers' compensation question, which in Texas is genuinely a choice.

Texas is the only state that does not require private employers to carry workers' compensation at all. A guard company can lawfully operate as a non-subscriber from its first employee. Three obligations come with that choice: file Form DWC-005 within 30 days of hiring your first employee and again every year between 1 February and 30 April; post and give the employee notice required under 28 TAC 110.101; and report work-related injuries on Form DWC-007 once you have five or more employees.

The real cost is legal rather than administrative. A non-subscriber forfeits the common-law defences of contributory negligence, assumption of risk and the fellow-servant rule in an employee injury suit. For an armed guard operation that is usually a bad trade — which is why most buy coverage or an occupational accident plan regardless. Note too that all Texas governmental entities must carry coverage, so public-sector guard contracts commonly require their contractors to carry it even though the state does not.

Your launch checklist

Tick these off as you go. Progress is saved in your browser, so you can come back in a month and pick up where you stopped.

Bonus: Use Technology to Stay Compliant and Professional

Look again at that disciplinary list. Failure to maintain records under 37 TAC 35.3, 35.111 and 35.112 suspended four Texas companies in a single month, and failure to cooperate with an inspection suspended six more. Those two categories are the same problem wearing different labels: when DPS asks what happened on a post, the company cannot produce it.

Patrol records that are GPS-pinned and timestamped as they happen are not a nice-to-have in a state that inspects. They are the difference between answering an inspector in an afternoon and spending three weeks reconstructing a month of shifts from memory. See how Safetrac handles it.

Final Thoughts

Texas rewards operators who treat the licence as a recurring obligation rather than a one-time hurdle. The entry cost is low, the local pre-emption rule is a genuine competitive advantage, and unarmed officers can be trained in-house and deployed quickly — an operational flexibility California and Florida simply do not offer.

But the company licence is annual, the insurance certificate has to stay current in the DPS database to renew it, and the administrative failures that suspend Texas companies are boring, cheap and entirely avoidable. Build the calendar before you build the roster.

If you are comparing states, the requirements diverge more than you would expect: California tests a 2,000-hour experience minimum and mandates a surety-free but heavily trained model, while Florida requires 40 hours of licensed-school training before an unarmed officer can work a single shift.

Official Texas resources:

• DPS Private Security — Licensing and Registration
• Company and School Licence Types
• Company Representative Experience and Examination
• DPS Fee Schedule
• Occupations Code Chapter 1702