Producer Company Registration

Producer Company mean any person engaged any activity connected with or relatable to any primary produce. The objective behind the incorporation of Producer Company is to production, harvesting, procurement, grading, pooling, handling, marketing, selling, and export of primary produce of the Members or import of goods or services and other related activities for their benefit. Producer Company must deal primarily with produce of active Members and is allowed to carry activities by itself or through other entities- on the behalf of the members of Producer Company can be registered by any of following combination by complying with the prescribed limited formalities of the Companies Act, 2013.


  • * Ten or more individuals, each of them is producer
  • * Ten or more individuals and producer institution
  • * A combination of ten or more individuals and producer institution

Producer Companies are those companies where minimum ten members are required and there is no limit for maximum number of members. A Producer company provides limited liability to its members. Under any circumstance, whatsoever shall not become or be deemed to become a public limited company. A minimum of five Directors are required for establishing a Producer Company.
With agriculture being the mainstay of the Indian economy, this sector employs more than 50% of India’s total workforce and contributes almost 17-18% to the country’s GDP.
Bearing in mind the persistent issues of farmers and agriculturalists (collectively termed “Producers”) in India, like agricultural labour, technological advancements, policy changes, etc., and to bring in better governance and channelize the agricultural activities, the concept of “Producer company” was introduced in 2002.



overview

A producer company can be defined as a legally recognized body of farmers/ agriculturists with the aim to improve the standard of their living, and ensure a good status of their available support, incomes and profitability. Under Companies Act 2013, a Producer Company can be formed by


  • 10 individuals (or more) or
  • 2 institutions (or more) or
  • by a combination of both (10 individuals and 2 institutions) having their business objective as one of the following:
list
of the primary produce of the Members or import of goods or services for their benefit.
Before we proceed further, let’s try to understand what exactly a producer and producer
diagram

Activities

Producer Company may carry on any of the activities as specified below either by itself or through other institution

  • Processing

    This will include preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members;

  • Manufacturing and Selling

    It will help in manufacturing, sale or supply of machinery, equipment or consumables mainly to its Members;

  • Assistance to Members

    Producer company helps in providing education on the mutual assistance principles to its Members and others;

  • Promotional Activities

    Producer company helps in rendering technical services, consultancy services, training, research and development and all other activities for promotion of the interests of its Members;

  • Conserving Primary Produce

    One of the major activity is generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce

  • Insurance

    Producer company take care of insurance of producers or their primary produce;

  • Principles of Mutuality

    Producer company promotes techniques of mutuality and mutual assistance amongst the Members

  • Financial Assistance

    The most important objective of Producer Company is financing of procurement, processing, marketing or other activities by extending of credit facilities or any other financial services to its Members.

Advantages

The main purpose of the Producer Company is to form a farmer society in the form of a company and conversion of an existing co-operative society into an organized company. For this, they perform certain beneficial activities like production, procurement, pooling, harvesting, grading, handling, marketing, selling and import/export of the primary producers of all the members.


Here are some important benefits of registering a Farmer Producer Company in India:
advantages

Separate Legal Entity

Just like any other type of company, a producer company is a separate legal entity under the Act. Consequently, a producer organization has a wide lawful limit and can claim property and furthermore acquire obligations. The individuals (Directors) of a producer organization have no obligation to the lenders of a producer organization.

Good Governance

Since the Government is completely responsible for keeping the interest of the members, it ultimately helps in success of the Producer Company.

Better Facilities:

A Producer Company is a great stage for the primary farmers to get better facilities which they are unable to get from the other mediums. Members who work in producer companies can easily access government services like Pension, loan, Scholarship etc.

Tax Benefits:

In the union budget of 2018-2019, it was mentioned that 100% deduction will be allowed to those companies which register themselves as a farmer-producer companies with an annual turnover of Rs. 100 crores and earning profit out of the same. Hence, they need not to pay any tax. Since farmers are the pillars of our economy, government has extended a 100% deduction to farmer Producer Company.

Simple Management:

Registration as a producer company is quite an easy process. The company can make changes in the Board of Management through filing some simple forms with the concerned ROC.

Loans and Investment:

The members of the producer companies are initial producers, hence they need finance from time to time. NARBAD bank is inaugurated by the government for the farmers’ producer companies. This bank offers loans to the farmers for a period not extending six months to meets the needs of the procedure companies. In the event, if the members of the procedure company need finance for farming they can effortlessly take from the NARBARD bank for a specific period of time.

Continuous Existence

A producer company has ‘unending progression’, which means that it has continuous presence until it is legitimately wound up. A producer company is unaffected by the death or other take-offs of any kind.

Maximum dividend

Every Member shall on the basis of share capital contributed, entitled to receive maximum dividend as may be specified by the articles

Internal Audit

Every Producer Company shall have internal audit of its accounts carried out, at such interval and in such manner as may be specified in articles by a chartered accountant.

Documents/Details required for Producer Company (FPC/FPO) Registration

  • Proposed Names of Proposed Company.
  • Authorized & Paid Capital.

  • From All Directors and Shareholders (Minimum 10)

    1. Copy of PAN Card
    2. Copy of Identity proof (Aadhaar Card/Passport/Driving License/Voter Card)
    3. Copy of Address Proof (Latest Bank statement/Electricity Bill/Telephone bill/Postpaid Mobile Bill)
    4. Passport-sized photograph of all directors and shareholder
    5. Producer certificate of all subscribers/ Directors.
    6. Khasra/Khatauni of all subscribers/Directors
    7. Mail id and Mobile No.
    8. Qualification
    9. Shareholding details

  • For Registered office proof of the company

    1. Utility Bill such as electricity bill/telephone bill/Postpaid Mobile Bill/Gass Bill for proposed Registered office address of company.
    2. NOC/Rent Agreement