A body of farmers / agriculturists functioning together for the betterment of the farmers’ living conditions is termed a Producer Company. A Producer Company ensures that the farmer community will not get low-balled when it comes to income and profitability. This is achieved by contributing and having or renting warehouses, cold storage facilities, bagging better negotiation of price for their produce, providing loans to members, procuring seeds, fertilizers and other farming equipment at lower rates. Their overall profitability improves with these undertakings. The liabilities of the members are limited in a Producer Company.
A Producer Company requires a minimum of either 10 individuals (every one of them being a producer) or 2 producer institutions to form. There is no upper limit on the maximum number of members or institutions required. A combination of 10 individuals and 2 institutions as well, can create a Producer Company. Whether it is the individuals, the institutions or a combination of both, the partakers must have one of the following as their business objective in pertinence to the chief produce of the members:
a. Procurement d. Grading g. Marking
b. Production e. Pooling h. Selling
c. Harvesting f. Handing i. Export of the primary product and import for the benefit of members
Both new and existing co-operative businesses can benefit from this scheme. Companies Act prescribes a minimum of 5 directors and maximum of 15 directors to incorporate a producer Company. The minimum capital requirement is 5 lakhs. The Producer Company Board can provide financial assistance to the members of the company through credit facility, and loans and advances.
The first step to registration is applying for the name of the Producer Company. The name must be unique. Application bearing the proposed names need to be submitted along with the fee. CRC will approve the name after verification.
All proposed directors need to obtain Digital Signature Certificate (DSC) from a government recognized certifying agency. Identity proof, address proof, contact details and passport size photographs of the directors are required to obtain DSC. The Director Identification Number (DIN) will be automatically created after incorporation of the company.
Once the name is approved and DSC is obtained, the incorporation process can be initiated by preparing and filing the Physical MoA and AOA along with other relevant documents.
After proper verification, the certificate of company incorporation will be issued by the Registrar of Companies within 30 days of the receipt of the documents. Certificate of Incorporation validates that the Producer Company has come to existence and has perpetual succession.
(Mandatory For Indian Resident)
For Company in Registration:
Authorization from the owner or authorized occupant of the premises.
Utility Bill in owner’s name.
For Directors and Shareholders.
Following are the post incorporation compliances:
Producer Company does not essentially need individuals to form one. Institutions too can form a Producer company. If individuals are forming a Producer Company, it requires a minimum of 10 individuals. If institutions are forming such a company, the minimum requirement for company formation is 2 producer institutions. A combination of 10 individuals and 2 institutions as well, can create a Producer Company.
No, directors should always be individuals.
A Producer Company requires to have a minim of 5 directors. The maximum limit is 15.
Yes, there is a minimum capital requirement of Rs. 5, 00, 000.
No, tax benefit and exemption are dependent upon the agricultural activities that a Producer Company carries out.
Directors can continue in their capacity for a period not less than one year but not exceeding five years. However, they are eligible for re-appointment.