Incorporation of Producer Company
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Have Queries? Talk to CECL Experts
Who doesn’t know that India is rich in the Agricultural Sector? The major portion of Indian economy depends largely upon agricultural activities and to support them, farmers were also given corporate entity level recognition by allowing them to register Producer Companies. Agriculture industry in past few decades emerged as a new global phenomenon giving space for more Producer Company Incorporation. However, due to lack of awareness, still some application in agricultural sector is at an age of evolution.
Before Producer Company Registration in India, Primary producers and farmers were struggling a lot to get the production technology and post harvesting material. This was the time when the Government of India recognized the need of farmers and decided to help them in a best possible manner by Producer Company Registration with a panel of experts was formed to address this issue who come up with the idea of Producer Company.
Producer Companies as an Institution have been conceptualised and structured, taking into the considerations of farmers, agriculturists (also known as Producers), with a view that the business activities relating to agriculture, be channelized and governed in a formal manner. Producer Company is a company in the form of business organization. These types of companies are working like co-operative societies. The rational behind the introduction of producer companies is to bridge the gap between industry and agriculture, rural and urban areas. A producer company in India is a company registered under the Companies Act with mutual objectives of agriculture production, procurement, post-harvesting processing activities, import goods, selling and distribution, export of primary production of the members to earn more benefits.PAN Card is mandatoryID Proof: Passport/ Election ID Card/ Passport for directors/ shareholders.Residential Proof: Bank Statement/ Mobile/ Telephone/ Electricity bill for directors / shareholdersPassport-sized photographs of all directors and shareholder.Proof of all Promoters to show as Farmers from Gram Panchayat/ Local Authorities to be eligible for Producer Company RegistrationRegistered Office Proof: Copy of Utility bill Proof not older than 2 months which can be Electricity/ Mobile/ Telephone/ Gas Bill with NOC.In case of rented property: Rent agreement from the owner.Any other documents as may be required by the MCA (ROC).If you wish to register a Producer Company in India, below are the Registration Procedure of Producer Company Incorporation:
Obtain Class III DSCReserve Name from MCAFile Requisite Form for IncorporationFile Resubmission after Remarks (if any)Obtaining Certificate of Incorporation, MOA & AOA, PAN & File Certificate of Commencement of Business with the departmentProducer Company can be formed by ten or more individuals or two or more institutions or by a combination of both having their business objective as one of the following:
production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the members or import of goods or services for their benefit. processing including preserving, drying, distilling, brewing, vinting, canning and packaging of the produce of its members. manufacturing, 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 interests of its members. generation, transmission and distribution of power, revitalisation 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 the members as may be decided by the Board. financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) above, which include extending of credit facilities or any other financial services to its members.Note: The intent of Producer Company Registration is to empower all the small and medium farmers so that their economies can be unbarred, and they could also opt the latest and new technologies to trail better and improved lives.
Requirements to register a producer company:
Minimum number of 5 Directors and 10 Members Minimum paid-up capital: Rs. 5 LakhsPersons should have proof of being FarmerDocuments as required by the MCALegal Framework: These types of companies are registered and governed by the Companies Act. We, the team of CECL can help you to register your Producer Company.
Separate Legal Identity: Like other form of companies, Producer companies also has its own legal identity in the eyes of law which means it can purchase and sell propety on its own name.
Limited Liability: Another important feature of Producer Company is that the liability of members is limited to amount contributed by them in the form of capital which also mean that their personal assets cannot be used to meet the losses and debts of the company.
Credibility: Since Producer companies are regulated by companies act, credibility and reliability of farmers increases on such types of companies.
Loan requirement: Because of its legal nature, Producer Company can easily get Loan from various institution. Working capital requirements and other credit facilities are generally given to the members of the Producer Company for a period of 6 months or less than that.
Perpetual Existence: A producer company has perpetual existence which means company will continue until it is legally dissolved. 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.
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.Just like Private limited company, Producer Company is also registered as per the rules and regulations of Companies Act. The process starts with obtaining a Digital Signature Certificate (DSC). After that, the applicant has to apply file SPICE+ form along with chartered document such as Memorandum of Association and Article of Association and other required documents with the department. It may be noted that the name must end with “Producer Limited Company” and should be unique and non-offensive. If all goes well and the registrar is satisfied with the documents and application the company would receive the incorporation certificate. Don’t worry about the Producer Company Registration, Compliance Ease has a team of professionals who will take care of all the formalities relating to Producer Company Registration.There are Tax Exemptions for the Registered Producer Companies as they enjoy numerous tax benefits such as exemption from agricultural income under section 10(1) of the income tax act, 1961. The exemption varies based on activities carried out by the farmers such as the agricultural income is 100% exempted from the income tax while the income earned from the production of green tea is 60% exempted as per the law.