Appointment of the auditor is mandatory in all type of companies & Only CA is eligible to be appointed as Statutory auditors in a company. Important highlights of appointment of...
The backbone of Indian Economy is agriculture. However, almost 85% of the Indian Farmers are small or marginal farmers having land holdings not more than 2 hectares. This fragmentation among farmers and their farmlands has led to disorganization, making it difficult for Indian farmers to adopt latest farming technologies. However, organizing these farmers into producer companies helps in achieving economies of scale which in turn helps in improving the livelihood of farmers.
Producer Company is a company registered under the Companies Act; 2013 which carries out any of the following activities:
- Producing, harvesting, grading, procurement, handling, marketing, selling, export of primary production of the Members or import of goods or services for their benefit.
- Processing, preserving, drying, distilling, brewing, canning and packaging of member’s produce
- Manufacture, sale or supply of equipment or machinery to its members.
In simple words, the concept of Producer Company aims at empowering the farmers by creating clusters of farmers and organizing them as Producer Company.
Features of Producer Company
- It is treated as a private limited company.
- These companies are limited by share capital and the members have limited liability
- The maximum number of members can exceed 50.
- A producer company can never become a public (or deemed public) limited company.
Objects of the Producer Company:
- Producing, harvesting, grading, acquisition, handling, marketing, selling, export of primary manufacturer of the Members or import of products or services for their profit.
- Processing, preserving, drying, distilling, brewing, canning and packaging of member’s manufacture. Manufacture or supply of machinery &equipments to its Members.
- Providing education on principles of mutual assistance to its members.
- Rendering technical, consultancy, training, research and development and such other services or activities for the promoting the interests of its members.
- Ensuring the primary produce of producers
- 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 above-mentioned activities
Key Compliances of the Producer Company
- Name of the company
Name of the company shall end with the word “Producer Company Limited”
- Minimum number of the Directors
The Minimum number of directors which are mandatory to run a production company is 5. The maximum limit is 15.
- Election of the Directors
The election of directors is required to be conducted within a period of ninety days from Producer Company registration. However, the period has been relaxed to 365 days instead of 90 days for the Inter-State co-operative society which is incorporated as Producer Company.
- Alteration in Memorandum of association and Articles of Association:
Any alteration in MOA and AOA of the Company shall be in accordance with the provisions of Section 581B by passing a Special Resolution.
In case of alteration in Article of Association, the resolution shall be approved by at least 2/3rd of the elected directors or 1/3rd of the members.
The copy of altered MOA and AOA is required be filed with the Registrar of Companies within 30 days of such alteration.
- Chief Executive
Every producer company is required to appoint a full-time Chief Executive whose appointment shall be confirmed by the Board amongst persons other than the members.
- Company Secretary
Every Producer Company whose annual turnover exceeds Rs. 5crores in each of continuous three proceeding financial years is required to appoint a whole time Company Secretary.
- Share Capital and transfer of the shares of Producer Company
The Company shall consist of only equity shares.
The articles may provide its active members with special rights.
The shares of Producer Company are not transferable. However, shares with special rights can be transferred, with prior approval of the Board.
Every member, on becoming a member of the company is required to nominate a person within three months. The nominee is entitled to all the benefits on the death of the member. If the nominee is not a producer, he shall be directed by the Board to surrender the shares.
- Meetings of the Board :
The board shall hold four meeting in every year with the gap of not more than three months between two meetings.
The notice shall be given in advance at least 7 days before the Meeting by the Chief Executive. Shorter Notice can be called by stating the reason in the Meeting.
The quorum 1/3rd of total Directors and minimum 3 Directors.
- Annual General Meeting of producer company:
First AGM of the Company shall be held within 90 days from the date of incorporation.
The Registrar may grant the extension for a period not exceeding 3 months. The extension is not eligible for a first annual general meeting.
The Producer Company shall hold its Annual General Meeting within 6 months from the date of the end of financial year and not more than 15 months shall elapse between the dates of two Annual General Meetings.
The fourteen days prior notice shall be issued to call AGM.
The Directors Report, the audited balance sheet and profit and loss account shall be filed with ROC within 60 days of the date of AGM. The quorum of AGM is 1/4th of the total number of members.