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Incorporating a security guard company: the PSISA licence names the entity
A company that sells security guard services in Ontario needs its own agency licence under the Private Security and Investigative Services Act — separate from the individual licences your guards carry — and that licence is issued to a specific legal entity. So the corporation has to exist before the licence, and both have to exist before the first contract. For a business that puts uniformed staff on other people's property around the clock, the corporation is also the only counterparty a serious client will sign with.
By the AnalytIQ Accounting team · Last reviewed: August 12, 2026
Two layers of licensing, and only one of them is yours today
Guards and private investigators hold individual PSISA licences — but the moment you stop working shifts yourself and start selling the services of guards to clients, the business needs an agency licence of its own. That licence is granted to the legal entity, comes with conditions including commercial general liability insurance at the level the regulations set, and does not float between structures: a licence obtained as a sole proprietor does not become the corporation's licence later. Confirm the current conditions with the Ministry when you apply, and put the application in the name of the company you intend to run for the next decade.
The order of operations follows from that. Incorporate, open the corporate bank account, place insurance in the corporate name, then apply for the agency licence — and only then bid on work. Reversing the sequence means paying for licensing twice and explaining a name change to every client you have.
The paperwork clients verify before you post a single guard
Condo boards, property managers, logistics operators, and construction GCs screen security vendors hard, because your people hold their keys. The onboarding package is predictable, and every document in it must trace to one corporate legal name:
| Document | In whose name | What the client checks |
|---|---|---|
| PSISA agency licence | The corporation | Valid, current, and matching the contract counterparty |
| Service contract | The corporation | Indemnities, response times, and termination terms |
| Certificate of insurance | The corporation | Coverage limits, with the client named as additional insured |
| WSIB clearance certificate | The corporation | Premiums current, so liability cannot flow up to the client |
| Guard licences | Each individual guard | Valid for every person who appears on site |
Some contracts add a fidelity bond covering employee dishonesty on client premises, and PSISA rules also reach into details like uniforms and vehicle markings, so treat the regulatory file as part of vendor onboarding rather than an afterthought. None of this package assembles cleanly around a sole proprietorship, which is why the corporation is effectively the price of admission to commercial guarding — and why the legal name should be chosen once and never touched.
Payroll is the business — and its liabilities scale with headcount
A security company is a payroll engine with a licence attached. Guards working your schedule, in your uniform, under your site orders are employees, and paying them on invoices as contractors is the industry's most common and most expensive shortcut — CRA and the ESA both look through it, and the reassessment arrives with years of CPP, EI, and penalties at once. Budget properly instead: WSIB from the first hire, vacation and public holiday pay across 24/7 rotations, and Ontario Employer Health Tax once payroll clears the exemption on the first $1 million.
One liability no corporation absorbs: source deductions withheld from guard pay are trust funds, and directors answer for them personally. In a business running weekly payroll for dozens of guards, remittance discipline is worth more than any clause in your minute book.
Thin margins make the corporate tax rate matter more, not less
Guarding margins are single-digit after wage burden, so the spread between Ontario's roughly 12.2% small business rate and personal rates above 50% is the difference between building working capital and never having any. Retained profit funds the payroll you carry before clients pay, the patrol vehicles and radios the next contract requires, and the buffer that lets you say no to a client who pays in ninety days. Register for HST immediately — commercial clients recover it as input tax credits — and in Peel's warehouse corridor, where guarding demand is dense and contracts are won on compliance, a clean corporate file is a genuine competitive asset.
Sequence it once, correctly
Articles with flexible share classes, program accounts (RC, RT, RP), WSIB registration, insurance, agency licence, then contracts — in that order, each in the identical corporate legal name. If the company takes cross-border work or a US parent ever comes calling, the added layer sits on our cross-border tax page for security companies. For the incorporation, registrations, and the annual returns that keep the licence file clean, see our incorporation and compliance service.
Source: Private Security and Investigative Services Act, 2005.
Common questions.
My guards are licensed — does the business still need its own licence?
Yes. Selling the services of security guards requires an agency licence under the PSISA, issued to the legal entity and carrying its own conditions, including liability insurance. Individual guard licences never cover the business that employs them.
Can I pay guards as subcontractors to keep things simple?
Not if they work your schedule, wear your uniform, and follow your site orders — that is employment, and misclassification reassessments arrive with years of CPP, EI, and penalties at once. Build the payroll properly from the first hire.
Why incorporate before applying for the PSISA licence?
Because the licence names a specific legal entity and does not transfer from a sole proprietorship to a later corporation. Incorporating first means one licence application, one insurance placement, and one name across every document clients verify.
Related reading
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