Producer Company

AGRAWAL KANHERE ASSOCIATES

Producer Company

All you need to know

What is Producer Company?

A Producer Company is a company, formed with an objective of production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit. Term “Produce” means things that have been produced or grown, especially by farming. This means that, a Producer Company deals primarily with agriculture and post-harvest processing activities.

Conditions to form a Producer Company:

  • A Producer Company can be formed by 10 or more Individuals as producers.
  • Two or more producer institutions or a combination of 10 or more producers and producer institutions.
  • A minimum capital of Rs. 500,000 is required to incorporate a Producer Company.
  • The share capital of a Producer Company shall consist of equity shares only.
  • The shares held by a Member in a Producer Company, shall be in proportion to the backup of that company.
  • There should be minimum 5 directors and maximum of 15 directors in aProducer Company.
  • A full time chief executive (CEO) should be appointed by the board.
  • There is no maximum limit of the members.
  • The Producer Company in India cannot be deemed as a public company.
  • There should be at-least four boards meetings every year and the meetings should not be held less than once every three months.

Who can become a Member in Producer Company?

  • A person being a “producer” or a “producer institution” (whether incorporated or not) can be admitted as member of Producer Company

    • Over the period Producer Company has gained popularity due to the following:

    • Co-operatives have largely been state promoted, with a focus on welfare rather than to do business on commercial lines and more State government intervention in the management of Co-operatives.
    • Whereas Companies Act is central legislation comparatively more liberal and minimal government control in the management of the Company.
    • A Producer Company is hybrid of Company and Co-operative Society.
    • It combines the goodness of a co-operative enterprise and vibrancy and efficiency of a company and accommodates the unique elements of cooperative business with a regulatory framework similar to that of a company.

    In India, a vast majority of farmers are marginal farmers with minimal land holdings individually. This restricts them to use the latest technologies in farming. This results in to lower economies of scale. A Producer Company is aimed at organizing a group of marginal farmers and ensuring larger economies of scale.

    Why caagrawalkanhere as Service Provider for Your Producer Company Registration?

    caagrawalkanhere is a group of intellectuals. The entire team of caagrawalkanhere consists of Highly qualified CA, CS, Lawyers and business administrators. caagrawalkanhere would be a one stop destination for your Producer Company Registration. We also provide services like Start up advisory, Secretarial compliance services, PAN / TAN application, DIN registration, GST registration, Trademark registration, GST / Income tax return filing and many more. You may get in touch with our compliance manager on 07552761432 or email info@caagrawalkanhere.com for free query and to know more about the services provided by us.

    Advantages of a Producer Company Registration

    Points to make your decision easy

    Separate Legal Entity

    A Producer Company is a legal entity and a juristic person established under the Act. Therefore, a Producer Company has a wide legal capacity and can own property and also incur debts. The members (Directors) of a farmer producer company have no liability to the creditors of a Producer Company.

    Tax Benefits

    If the companies are registered as farmer-Producer Company with an annual turn over of Rs. 100 Crores, then such companies will have 100% tax deduction and earning profit out of the same will not bother to pay any tax. The government has extended a 100% deduction to farmer Producer Company.

    Limited Liability

    Limited liability in a farmer Producer Company means that if the company goes through some financial distress because of business activity, the personal assets of members of the Producer Company will not be used to pay the debts of the Producer Company. The members liability will be limited only.

    Loans & Investments

    The members of the Producer Companies are initial producers, hence they need finance from time to time. NABARD bank offers loans to the farmers for a period not extending six months to meet the needs. In the event, if the members need finance for farming they can effortlessly take from the NABARD bank for a specific time.

    Transferability

    Interest in Producer Company can easily be transferred by transferring its shares. The Board of Management of a Producer Company organization controls the exercises of the Producer Company. Its board of management is easily transferable as such. This can be effected simply through the filing of forms with Registrar of Company (ROC).

    Perpetual Succession

    A Producer Company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved. A Producer Company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.

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    Documents Required for Producer Company Registration

    Quick Checklist

    • Photograph of all the Directors and Members
    • PAN Card of all the Indian Directors and Members
    • Apostile ID Proof of all the Directors & Members (Driving License/Passport/Voter ID)
    • Electricity Bill or any other utility bill for the address proof of the Registered Office
    • Special requirement: Proof of farming in the form of 7/ 12 extracts of Agricultural Land or certificate from District Tahsildar (proof of farming will differ from state to state)

    How to register Producer Company?

    5 Easy Steps

    1

    Obtain DSC

    2

    Reserve Your Company Name

    3

    Submission of MOA & AOA

    4

    Get Company’s Incorporation Certificate

    5

    Get Company’s PAN & TAN

    Fill Simple Checklist

    A compliance manager will get in touch with you to collect your documents along with a simple checklist. You need to fill up that checklist and submit along with your documents for verification. Our team of experts will verify the documents provided by you and take the procedure further. The compliance manager dedicated to you will keep you updated on the progress of Company Registration throughout the process.

    Name Approval

    Once your documents along with Checklist are submitted, we shall proceed with the application of your Digital Signature and subsequently the approval of name for your Producer Company. You may suggest up to three names of your choice for your Producer Company. Names should be unique and suggestive of the Company’s business. We will proceed with application for name for your Producer Company in Part A of SPICe Plus form.

    Producer Company

    We will draft the MOA (Memorandum of association) and AOA (Articles of association). We will file the incorporation documents with MCA through in part B of a form called “SPICe Plus (SPICe +)” along with the subscription statement. Usually, MCA approves the forms within 4-5 days once filed and issues Incorporation Certificate with CIN. PAN & TAN are allotted alongside. You may then proceed to open your Company Bank Account.

    FAQs On Producer Company

    Get answers to all your queries

    “Producer” means any person engaged in any activity or connected with or relatable to any primary produce and primary produce of farmer is defined as produce of farmer arising from agriculture including animal husbandry, horticulture, flori-culture, Fish-farming, viticulture, forestry, forest products, re-vegetation, bee raising and farming plantation products), or from any other primary activity or service which promotes the interest of the farmers or consumers or produce of persons engaged in hand loom, handicraft and other cottage industries or any product resulting from any of the above activities, including by-products of such products.
    “Producer Institution” means a producer company or any other institution having only producer or producers or Producer Company or Producer Companies as its member whether incorporated or not having any of the objects referred to in section 581B and which agrees to use the services of the Producer Company or Producer Companies as provided in its articles.
    It is valid lifelong once granted, until and unless revoked.
    The formation and regulation of the Farmer Producer Company is governed under the provisions of the Companies Act, 1956, along with Companies Act, 2013, and the rules made thereunder.
    A minimum of five people is required to register a Producer Company in India.
    ... ...

    Reviews

    CA Agrawal

    Shubham Thakur

    Thank you Team for the excellent service. Your commitment, knowledge of the matter and proactive approach were all very impressive and I am extremely happy with the service. Hope to use the support again in future.

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