Producer Company Registration
Easy and fast process.
Producer companies are legal entities recognized by the Companies Act, 2013. They can procure, produce, harvest, grade, pool and handle agricultural products; market and sell these products; or export them. They can also get up to 60% of their income tax-free.
The Companies Act, 2013 introduced a new form of company called a Producer Company. It gives farmers, who are involved in activities related to growing and cultivating crops, the opportunity to form a company. A Producer Company can be formed by 10 or more farmers or two or more producer institutions such as agricultural universities. Producers can only use equity capital (money put into the business) in their companies, and they must have at least five directors and a minimum authorised capital of ten thousand. The procedure for forming this type of company is similar to that for forming a private limited company.
Producer Company can only do business of production, procurement, harvesting, grading, marketing, trading of the primary produce with the help of its members and financing them for these activities which includes extending credit facilities also. It cannot deal with the directly with any public and can only work with its members for benefit of its owners. However, one can easily become members under Producer Limited Company after signing few documents and easy process.
Document and information required for producer company formation
- DIN number allotted by ministry of corporate affairs
- Self-attested dated and signed PAN card copies of all directors and members.
- Self-attested dated and signed Photo-ID proof issued by government such as Aadhar Card, Voter ID.
- Colour passport size photo of all directors and shareholders.
- Valid phone no and email id of all directors and shareholder.
- Business address proof such as Water Bill, Gas Bill, Telephone Bill, Mobile Bill, Electricity Bill.
- Rent agreement if business is on rented premisses including NOC for business purpose.
- Passport of all the directors and shareholders if they have.
- If Business premises is owned then sale deed related to such place.
- Farmer certificate issued by Panchyat or SDM.
- Declaration by the directors and shareholders including declaration of Land for farming.
Befits of registration of company as farmer producer limited company.
Special User Rights – The AoA may provide active members of the producer company with special user rights, such as preferential supply of additional produce by the active Member. The company issues appropriate instruments to active members in respect of such rights.
Separate legal identity – As with any other company, the producer company has a separate legal identity. The assets, liabilities, rights, debts and privileges of the company shall vest in it. The company can deal in its own name and hold the properties too. Changes in members or directors do not affect its existence or the rights and obligations relating to it.
Limited Liability of owners – The members and the producer institutions are not personally responsible for the debts and obligations of the company. Their personal belongings remain unaffected in any case of loss or winding up of company. With assurance to limited liability, producers can invest with lower risk into such businesses.
Benefits to members – Each member of the cooperative can initially receive only the value of their produce, as determined by the Board. The withheld price may be disbursed later in cash or by allotment of equity shares. Members are eligible for a limited return on their investment, but they can also be allotted bonus shares if there is a surplus after expenses have been covered. The surplus can also be disbursed as patronage bonus.
Process of incorporation of company as farmer producer limited company
Step 1 Preparation of document for Producer Company such as application for digital signature and filing same.
Step 2 preparation of main object, consent letter to act as director, form INC-9.
Step 3 Drafting and vetting of MOA and AOA, as per producer company incorporation rule.
Step 4 Online filing of name reservation application though MCA portal in e-form Spice+ Part A.
Step 5 Preparation of e-form such as Spice+ Part B, Agile, and filing the same with ROC for issue of COI.
Step 6 Issue of Certificate of Incorporation (COI) for producer company license by ROC.
Step 7 Preparation and filing of form for allotment of TAX number and TDS number.