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How to do Producer Company Registration in India

Under Companies Act, 2013, a Producer Company focuses on the activities such as harvesting, production, selling, marketing etc. of the primary produce of its members for their benefit.

Companies Act, 2013 has simplified the process of Producer Company Registration  to a great extent. Any entity who fulfills the criteria and objectives of Farmer Producer Company can apply for Producer Company Registration.

Registrar of Companies (ROC) shall scrutinize the e-form submitted by the applicant properly. Then, within maximum 30 days of the receipt of the documents, it will issue a Certificate of Incorporation (COI).

On registration, the Producer Company shall become a corporate body as if it is a Private Limited Company.

Benefits to members in Producer Company

The members of a producer company can avail the following benefits after obtaining the registration:

  • Initially, all the members of the Producer Company will get the amount for the produce supplied and pooled as assessed by the directors.
  • Later, the members will receive the withheld value in cash or Equity shares or in any kind.
  • Furthermore, the members of the company will be subject to receive bonus shares in the equal proportion to the shares held by every member.
  • The surplus will be provided to the members in the form of patronage bonus.

*Note: Patronage bonus is the distribution of the surplus income of the producer company to its members in the ratio to their respective patronage.

Is there any concession after Producer Company Registration?

Post Approval from Registrar, Producer Company enjoys certain benefits which are underlined below:

  • All fiscal / Taxes and other concessions;
  • All the licenses, benefits, other privileges, and exemptions as granted to the Inter-State Co-operative Society will be applicable on the Producer Company.

What is the minimum and maximum no. of Directors required for Producer Company Registration?

  • Minimum number of Directors: 5
  • Maximum Number Directors: 15

Note: If the inter-State Co-Operative Society is incorporated as a Producer Company, then such company may have more than 15 Directors from the date of its incorporation for a period of one year.

What is minimum amount of Share Capital required for Producer Company Registration?

The Share Capital of the Producer Company share consists of Equity shares only and minimum Authorized Capital of Rs. 5 Lac.

What are the benefits of Producer Company Registration?

After Producer Company Registration, the Company has certain exclusive advantages. Some of them are as follows:

  • It's a separate legal entity offering limited liability and perpetuity.
  • Governed by Central Government, Producer Company offers high credibility than those provided by the unregistered producer organization.
  • Change in Management on Board of the Producer Company can be easily carried out just by filing the prescribed form with ROC.
  • A registered Producer Company is entitled to own, sell or alienate the property in its name, etc.

Documents Required for Producer Company Registration

To obtain Farmer Producer Company Registration, one needs to submit the following documents:

  • DSC and DIN of the Directors;
  • Detailed information and documents related to the director such as PAN, Photo ID proof address proof, etc.
  • Drafted MOA and AOA of Producer Company.
  • Declaration and Affidavit of the Directors and members.
  • Address proof of location of the Producer Company.
  • NOC from property owner, if any.
  • Copy of Rental agreement if applicable.
  • And other Documents as deemed necessary.

Farmer Producer Company Registration process

Farmer Producer Company Registration process is same as that of Private Limited Company Registration process. Therefore, the process of registering a Producer Company is as follows:

  • Obtain the DSC (Digital Signature Certificate) and DIN (Director Identification Number) of the Directors of the Company.
  • Secondly, you need to apply for the company’s name approval using the RUN (Reserve Unique Name) Service with the ROC (Registrar of Companies).
  • Now, apply for the company’s incorporation in the e-form SPICe-32 along with all the documents.
  • If the ROC is satisfied with the application and documents, it will issue the Certificate of Incorporation.

Note: The name of the Farmer Producer Company must include the suffix “Producer Limited Company.”

Loans and Investments in Producer Company Registration

Primary producers are the individuals who are in constant need of financial support. Therefore, under Companies Act, 2013, a special provision was passed to help the members of a Producer Company, i.e. primary producers by providing them with loans.

The members of Producer Companies can avail the financial assistance from the Company through the following:

  • NABARD Loan

NABARD stands for National Bank for Agriculture and Rural Development. It helps the Producer Companies by offering them various financial assistance and support.

  • Credit facility

The credit facility is provided to the members of the company for six months and it must not exceed this time limit. Furthermore, such facilities should mandatorily connect with the company’s business.

  • Loans & Advances

The primary producers receive loans and advances against security. The loan is repayable within a certain time period which must not exceed seven years from the disbursement date of these loans and advances.

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