WHAT IS PRODUCER COMPANY?
Producer Company means a body corporate having objects or activities specified in section 581B and registered as Producer Company under this act. A producer company is formed by 10 or more individuals or two or more institutions dealing in agricultural produces or post harvest processing activities.
The companies act defines producer as any person engaged in any activity connected with or relatable to any primary produce. It is legally recognized cluster of agriculturists which aims to improve their incomes, statutes of their available support and profitability, and the standard of living.
To register a producer company in India, the following members in any of the combination is necessary;
- 10 or more individuals, each of them being a producer
- 2 or more producer institutions
- A combination of 10 or more individuals and producer institutions
Such a company can only have equity capital, require a minimum of five directors and an authorized capital of 5 lacs. The procedure of forming a producer company is similar to that of forming a private limited company.
INCLUSION (WHAT IS INCLUDED IN SERVICE)
- Digital signature for the proposed directors
- Director identification number must be obtained
- Accurate name search
- Approval of name from MCA
- Memorandum of association/article of association submitted to the ROC
WHY TO GET REGISTER?
- Separate legal entity
- Greater creditability
- Can sell or register property in its own name
- They can give loans to the agriculturists
- Name approval and reservation form INC-1
- Making DSCs and DINs for directors
- Filing incorporation Form INC-7 with the relevant ROC
- Filling forms like INC-22, DIR-12 etc.
- Submission of other necessary documents
- Limited liability upto the amount invested in the business
- Better management than a single farmer handling
- The members will initially receive the value for the produce or products pooled and supplied as the directors may determine .This amount is given out later either in cash or kind or by share allotment
- Members will be given bonus shares in proportion to the share held by them
- Tax benefit as the tax on agricultural income is exempted by Indian Income Tax Act
- NABARD has set up 50 crore producer organization development fund
- Expensive as audit required and if it crosses 5 crore turnover they must employ a full time company secretary
FREQUENTLY ASKED QUESTIONS
- Do I need to be physically present during this process?
-no, this is not required. The whole process is handled online.
- How much time is needed for setting up a producer company in India?
-it will take around more than a month to register a producer company. This will however, depend on the workload of Roc.
- What are the rules for picking a name for producer company?
-The first part must be unique and the second part must describe the nature of the business, most importantly it must end with “Producer company ltd”
- Pan card or Passport
- Voter’s id /driving license
- Latest bank statement/telephone bill electricity bill
- Passport sized photograph specimen signature
For registered office;
- Bank statement/electricity bill/telephone bill
- Notarized rental agreement
- No objection certificate form the property owner
TYPES OF PROCUCER COMPANY
- Production business :- The main type of producer companies are those involved in production, procurement or manufacture of any primary produce for its members and others too.
- Marketing business :– Even a business involved in the marketing or promotion of primary produce or provision of educational services to members and others can constitute itself as a producer company.
- Technical service business :– Any business offering technical assistance to producers, providing training and educational services or conducting research and development can register as a producer company.
- Financing business :– Any business financing producer activities, be it the production, marketing or development domain, can register itself as a producer company.
- Infrastructure business :- Business involved in providing infrastructure to producers, whether in the form of electricity, water, resources, irrigation techniques, land utilization, or consultation with regard to this, may constitute themselves as a producer company.