Producer Companies as an Institution have been conceptualized and structured, taking into the considerations of farmers, agriculturists (termed as ‘Producers’), with a view that the business activities relating to agriculture, be channelized and governed in a formal manner. Part IX-A was introduced in the Companies Act, 1956 by the Companies (Amendment) Act, 2002, which consists of Chapters I to XII, covering Sections 581A to 581 ZT, encompassing the provisions of producer companies. The Policymakers realized that the inspirer of India being an Agrarian Economy since ages, formalization and good governance have not even touched the Agricultural Sector. The challenges faced by primary producers, farmers due to their limited asset and capital base, climate issues, mobilization of resources, issues relating to agricultural labor, policy changes, technological advancements, transparency, governance of PRODUCER COMPANY REGISTRATION, and systems have been taken into consideration here by the policymakers. Principally the structure, concept, and philosophy of Co-operative Societies formed under the Co-operative Societies Act, 1961 has been kept intact as a basic framework and then the same has been improvised. Provisions relating to the conversion of the existing Co-operative Societies registered under various other statutes have been also incorporated so as to give an opportunity to the cooperative sector to corporatize itself.
A producer company registration is a company incorporated under Companies Act 2013 (formerly the Companies Act 1956) and shall carry on following activities as mentioned in section 581B of Companies Act 1956 :
- • Production, harvesting, procurement, grading, pooling, handling, marketing, selling, the export of primary produce of the Members, or import goods for their benefit.
- • Processing including preserving, drying, distilling, brewing, venting, canning, and packaging of the produce of its members
- • Manufacture, sale or supply of machinery, equipment or consumables mainly to its Members
- . • Providing education on the mutual assistance principles to its Members and others
- • Rendering technical services, consultancy services, training, research and development, and all other activities for the promotion of the interest of its members • Generation, transmission and distribution of power, revitalization of land and water resources, their use, conservation, and communications relatable to primary produce
- • Insurance of producers or their primary produce
- • Promoting techniques of mutuality and mutual assistance
- • Welfare measures or facilities for the benefit of Members as may be decided by the Board
- • Any other activity, ancillary or incidental to any of the activities referred to in above clauses which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner
- Over the period of time Producer Company has gained popularity due to the following aspects:
- • Co-operatives have largely been stated 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 a 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.
The Tax Benefits Available To A Producer Company?
The Income Tax Act, 1961, (“the IT Act”) specifically exempts tax on agricultural income under Section 10(1). It is to be noted that though the IT Act does not as per give any special benefits or exemptions to Producer Companies as such, depending upon the kind of agricultural activity it carries on, certain tax benefits can be availed. Dividend tax at the applicable rates is required to be paid by the Company at the time of patronage bonus, limited return distribution and the same will be tax-free in the hands of the members. Bonus shares will not attract any tax in the hands of the members at the time of allotment, however at the time of sale or redemption necessary provision of capital gain tax shall apply
Requirements for Producer Company Registration
- Obtaining digital signature certificate- In today’s modern world everything is done online now the days of pen and paper have gone All documents are submitted electronically and for that, each company should acquire a digital signature certificate that is employed to verify the legitimacy of the documents… A digital signature is obtained by all the directors which are used on all the documents by every director.
- Members- A minimum number of 10 and a maximum number of 200 members or shareholders are required as per the companies’ act 2013 before Producer Company registration.
- Directors- The least number of directors required for registering the private limited company is five. Each of the directors ought to have DIN i.e. director identification number which is assigned by the ministry of corporate affairs. One condition is among the two directors one must be the resident of India which means he/she should have stayed in India for at least 182 days in a previous calendar year.
- Name- one of the most important and major components for a producer company limited company is the name. The name of the company comprises three parts i.e. the name, the activity, and producer company limited company. The use of a producer company limited company at the end of the company name is compulsory. For the acceptance of the name, one should send at least 6 alternatives For the approval of the Registrar and all the names should be unique and expressive and the purposed name should not reassemble to any other in any means. Choosing the right company name is an important component is it will stay with the company throughout its life.
Registered office address- While going for the registration of the company, you should provide the temporary address of the company for the period of registration. However when the company has been registered then the permanent address of its registered office should be suited with the registrar of the company. The Registered office of the company is where the company’s main tasks are done and the working bodies are placed there with all documentation.
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- Two Digital Signature (DSC)
- Two DIN Number
- Name Approval Letter of the Company
- MOA & AOA + Certificate of Incorporation
- PAN and TDS number for the Company
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