Producer Company Registration
The main concept of the producer company is to empower the farmers by gathering clusters of farmers in an organised manner as a Producer Company.a Producer Company is a company that works mainly with agriculture and crops processing activities. Get more details on the Producer company from below and register your producer Company with our experts Help.
Agriculture has remained the center stage and backbone of the Indian economy for years. Its impact on the nation’s GDP is beyond incredible. 60% of India’s population relies on agricultural activities for their livelihood.For years, this sector was in desperate need of ground-up rectification against the pressing issues related to technological implementation, agriculture labor, policy changes, etc.
In light of this fact and to instill better governance, the government of India in 2002, with an expert committee, headed by Y.K. Alagh, came up with the concept of Producer Company.Since then, they are working with the motive to uplift Indian farmers and agriculturalists
The ‘PRODUCE’, Produce means the things have been produced or grown by farming. A Producer Company has been incorporated for the purpose of agriculture activities and post-harvest processing activities and object of incorporation of Producer Company is production, harvesting, procurement, grading, pooling, handling, marketing, selling, and export of primary produce of the Members or import of goods or services for their benefit.
The Legal Definition of Producer Company Isa body corporate possessing objects or undertakings as cited under section 581B andregistered as producer company under the Companies Act as Producer Company. The goals of such companies is related to all or any of the given matters:
Production / Harvesting / Procurement/ Grading / Pooling / Handling / Marketing / Selling / Import-export of primary produce
Objects of the Producer Company
The main objects of the producer company are as below:-
Production
Production activities which relates to harvesting, grading, procurement, pooling, marketing or export of agriculture produce outside the country.
Processing
Processing would include preserving, distilling, drying, brewing, vinting and canning related activities.
Manufacturing
Any type of manufacturing activities related to agriculture would be included under this.
Rendering Technical Services
Any Technology related services or Consultancy services or any research and development (R & D) would also be a part of a producer company.
Promotional Activities
Activities related to the promotion of technology and allied services would also be included under this.
Generating Activities
Generational activities which are related to producing electricity and water for producing agricultural activities.
Benefits of Producer Company Registration
A Producer company enjoys all the benefits of a private limited company such as:
Separate Legal Entity
Just like a private limited company, a registered farmer producer company is also considered as a separate legal entity that can purchase or sell land at its own name.
Limited Liability
The liabilities of the members are limited, and their personal assets cannot be used to cover up the debt and losses of the company.
Ease in Management
An applicant can make desired changes in the board of management by filling some simple form with regards to the registrar of Companies (ROC)
Tax Benefits
The Income Tax Act does not specify any specific tax benefit which essentially provides special tax benefits or exemptions to producer companies by its definition. However, subject to the agricultural activity carried out by the producer company, certain tax benefits and exemption can be availed.
For example,
- Agriculture Income of a Farmer is 100% Exempt from Income Tax
- Income earned from the production of green tea is 60% exempted
Hence, Tax benefit and exemption to a producer company is totally depending upon the activity it carries on
More Credible and transparent
More credibility is offered to the registered companies as compared to the non-registered ones.
Types of Producer Companies in India
The following are the different types of producer companies that exist in India.
Production Businesses
This type of entity deals with the production, procurement, or manufacturing of primary produce.
Marketing Businesses
This type of establishmentis engaged in the business of the marketing or promotion of primary produce or provision of educational services.
Technical Service Businesses
Such establishment primarily renders educational services and training to producers. It may also be engaged with activities related to research and development.
Financing Business
As the name suggests, the financial business is the one that offers financial assistance to companies mentioned in this list. Their major stream of revenue comes from the interest imposed on the disbursed amount.
Infrastructure Businesses
Such entities usually provide the infrastructure to producers in terms of water resources, electricity, land utilization, irrigation techniques, and so on.
Rules and Regulations for Easy Availability of Loans and Credits
The Producer Company aim to improve the standard of their living and ensure a good status of their available support, incomes and profitability. And Hence, Loans to member plays an integral part.
Law Relating to Loans And Advances& Credit Facilities
The Producer Company can provide Loans and advances would to its members against security for 7 or less than 7 years from the date of disbursement of the loan
Producer company shall provide Credit facilities its members of the for a period of 6 months or less than that.
NABARD Loan
NABARD stands for National Bank for Agriculture & Rural Development which helps to meet the financial requirements of small and regional scale farmers. The members of Producer Company can obtain loans under the NABARD loan scheme.
Prerequisite to form a Producer Company
The following eligibility criteria must be fulfilled for Incorporation of Producer Company:
Directors
As per Companies Act, 2013, minimum 5 directors are required for incorporation of Producer Company. Maximum 15 directors can be appointed.
Ten or More Members
Ten or more natural persons are required for the formation of a producer company and all the members of the producer company must be individuals. No limit for maximum number of Members. All the members should be primary producers
Two or More Institutions
Two or more private Institutions or companies can register for incorporating a producer company. Either 10 or more individuals or along with institutions can start the producer company.
Minimum Paid- up Share Capital
A producer Company have a minimum paid up capital of Rs. 5 Lakhs.The company can only issue equity share capital.
To Register as Private Limited Company only
Minimum Amount of Board Meetings
The producer company must have at least four board meetingsin a yearand it should hold after every three months
Company Name
The company must have the words ‘Producer Company Limited’ at the end of the name.
Process for Incorporation of Producer Company
The process of registering a Producer Company is similar to that of a Private Limited Company.
Application for DSC
The DSC of the director is require to file the online application form for a producer company.
DSC can be taken by submitting a DSC application attached with identity proof, address proof, photographs of the respective signatory.
Name Approval
Once, Digital Signature (DSC) is obtained, an application for name reservation is to be filed with the ROC in SPICE+ Form PART A. The name of a producer company must end with the words “Producer Limited Company.
Filling of online application for Incorporation
Once, the suggested name is approved by the Registrar of Companies (ROC), an application for incorporation is to be filed in the prescribed format for the incorporation of the Producer Company in SPICE+ Part B. This form if filed along with e-MOA(Memorandum of Association), e-AOA(Article of Association), AGILE-Pro (Details for registration under EPFO & ESIC/ GST / Bank account Opening), URC-1, INC-9, PAN and TAN Application.
Approval of application for Incorporation
Once the Registrar is satisfied with the application and the required documents filed for incorporation of Producer Company, ROC will approve the same and issue Certificate of Incorporation.
Documents required for Incorporation of Producer Company
Identity and Address Proof of Directors and members
- Passport size photographs of the directors
- Copy of Aadhar Card
- Copy of Driving License or Voter ID or Passport
- Copy of PAN Card
- Copy of bank statement or electricity bill or mobile bill (not older than two months)
- Copy of Passport
Proof of Registered Office
- Copy of electricity or any other utility bill (not older than two months)
- Rent agreement or lease deed(if rented)
- No Objection Certificate (NOC) from the owner of the property
Producer Company Compliances
There are following Producer Company Compliances-
Name of the Company:
Every producer Company shall have word ‘Producer Company Limited’ at the end of the name.
A number of the Directors:
Every Producer Company shall have a minimum five (5) Directors and maximum Fifteen (15) Directors on the Board.
Appointment of the Directors:
The Appointment of directors shall be conducted within a period of ninety (90) days from the incorporation of the Producer Company.
Additional Directors and/or Expert Directors
Expert directors or an additional director shall not exceed 1/5th of the total number of directors.Expert directors can be elected as a chairman but will not have any right to vote in the election of a chairman.
Share Capital and transfer of the shares of Producer Company:
The Producer Company can have only Equity Share.The Board may grant approval to the active member to transfer their share to another active member. In the event of Death, the shares shall be transferred automatically to the nominee appointed by the Member.
Alteration in Memorandum of association and Articles of Association:
Any alteration under MOA and AOA of the Company shall be in accordance with the provisions of Section 581B.
Annual General Meeting of Producer Company:
First AGM of the Company shall be held within 90 days from the date of incorporation. The Producer Company shall hold an Annual General Meeting every year and the gap between two Annual General Meeting should not exceed 15 months. The fourteen days prior notice shall be issued to call AGM. The quorum of annual general meeting is 1/4th of the total number of members.
The notice of Annual general meeting shall be accompanied by the following documents:–
(a) The agenda of the annual general meeting;
(b) The minutes of the previous General Meeting;
(c) The names of candidates for Appointment, if any, with qualifications of such candidate;
(d) The audited balance-sheet and profit and loss accounts of the Producer Company and its subsidiary, if any
Meetings of the Board :
The board shall hold four meeting in every year with the gap of not more than three months between two meetings. The notice shall be given at least 7 days before the Meeting. The quorum for the board meeting is 1/3rd of total Directors and minimum 3 Directors.
Chief Executive:
The Company should appoint Chief Executive and he should not be member of the company.
Company Secretary:
Every Producer Company, have an average annual turnover of Rs. 5 Crore or more in three consecutive financial years, shall have a whole time Company Secretary.
General Reserve and other reserves:
Every Producer Company shall maintain a general reserve every year in addition to the Reserves as may be specified in the Articles.
ANNUAL COMPLIANCES FOR PRODUCER COMPANY
| S. No. | Form Name | Section & Rules | Particular of Compliance. | |
| 1 | Receipt of MBP-1 | 184(1) | Form MBP- 1 | Every Director of the Company in First Meeting of the Board of Director in each Financial Year shall disclose his interest in other entities. |
| - | - | - | MBP- 1 | Director is also required to submit a fresh MBP-1, whenever there is change in his interest from the earlier given MBP-1. |
| 2 | Receipt of | 164(2) | Form | Every Director of the Company in each |
| - | DIR- 8 | 143(3)(g) | DIR – 8 | Financial Year will file with the Company disclosure of non-disqualification. |
| 3 | E- Forms Filing Requirements Annual Form | 581ZA | E-form: MGT-7 | Annual Return: Every Company will file its Annual Return within 60 days of holding of Annual General Meeting. Annual Return will be for the period 1st April to 31st March. |
| 4 | - | 581ZA | E-form: AOC-4 | Financial Statement: Company is required to file its Balance Sheet along with Statement of Profit and Loss Account, Cash flow statement, Directors’ Report and Auditors’ Report in this form within 30 days of holding of Annual General Meeting |
| 5 | Annual Form | Section 73 Rule 16 | E-form DPT-3 | Return of Deposit: Company is required to file this form every year on or before 30th June in respect of return of Deposit and Particulars not considered as Deposit as on 31st March. |
| 6 | Event Based Form | Section 90 | BEN-2 | Disclosure of Significant Beneficial Owner: Company shall file BEN-2 within 30 days of receipt of BEN-1 from Share holder. Note: On regular basis company have to check whether there is any SBO in company due to change in its shareholding or due to change in shareholding of body corporate members. |
| 7 | Annual Form | Rule 12A | DIR-3 KYC | KYC of Directors: All the Directors of company shall file this form on or before 30th September every year for all the directors of the Company. |
| 8 | Half Yearly Return | Section 405 | MSME-1 | Delay in Payment to MSME Vendor: Company have to file this return half yearly in respect of pending payments to MSME vendors as at end of half year. • April to Sep – 30th October • October to March – 30th April |
| 9 | Directors’ Report | 581ZA | Directors’Report shall be prepared by mentioning all the information required for Company under Section 134 read with relevant rules and relevant provisions of other Act. | |
| 10 | Circulation of Financial Statement &other relevant Dox | 581ZA | Company will send to the members of the Company approved Financial Statement, Directors’ Report and Auditors’ Report at least 14 clear days before the Annual General Meeting. | |
| 11 | Notice of AGM | 581ZA | The Producer Company shall in each year hold an Annual General Meeting and not more than 15 months shall elapse between the date of one Annual General Meeting to the next. A general meeting of the Producer Company shall be called by giving not less than fourteen days prior notice in writing | |
| 12 | Sending of Notice of AGM | 581ZA | The notice calling the annual general meeting shall be accompanied by the following documents, namely : – (a) the agenda of the annual general meeting ; (b) the minutes of the previous annual general meeting or the extraordinary general meeting ; (c) the names of candidates for election, if any, to the office of director including a statement of qualifications in respect of each candidate; (d) the audited balance-sheet and profit and loss accounts of the Producer Company and its subsidiary, if any etc | |
| 13 | Board Meetings | 581V | Board shall meet at least once in every three months and at least four such meetings shall be convened in every year. Quorum:- 1/3rd of the total strength of Directors subject to a minimum – 3 | |
| 14 | Appointment of Auditor | 581 | E-form ADT-1 | Auditor will be appointed for 5 (Five) years and form ADT-1 will be filed for 5-year appointment within 15 days of Annual General Meeting. |
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