Producer Company Registration in India

The process of registering a Producer Company is similar to that of a Private Limited Company. Documents required for Producer Company Registration. Producer who will promote/ incorporate the Company. Taxchakara offers registering Producer Company registration online in India to farmers in order to register and create their business.

About 60% of India’s population depends on agricultural activities for their bread and butter. To make it more sense, the agricultural industry is the backbone of the economy in India. But the farmers and primary producers are actually struggling a lot to get their profit. Being an agricultural-based country, almost India’s 85% of people are dependent upon farming activities. Most of producer company incorporation India is marginal or small scale farmers owning less than 2 hectares of farmland. Due to poor facilities and low production, the life of farmers is miserable. Hence, consideration their miserable condition in mind, the Government of India aligned an expert committee, led by Y.K. Alagh to take care of the matter. Later in 2002, the expert committee brought a new concept named as Producer companies in the Indian economy. From then on, the committee is working with the primary aim to uplift the Indian farmers and agriculturalists or Producers collectively.

What is a Producer Company?

A company formed officially with the primary aim to improve the standard of farmers and agriculturists and it is named as a ‘Producer Company’. This type of company is formed under the Companies Act 1956, and according to the act theproducer company registration can be formed with a minimum of 10 individuals or more individuals or with 2 institutions or more or with a combination of both like 10 individuals and 2 institutions. And it should have one of the following as their business aim:

  • Production
  • Procurement
  • Harvesting
  • Marketing
  • Grading
  • Handling
  • Pooling
  • Selling
  • Export

To start a Producer company, the individual or the farmers have to get a Farmer Producer Company Registration according to the rules and regulations of the government.

Advantages of a Producer Company Registration in India

A Producer company relishes all the advantages of a private limited company. Some of them are mentioned below:

  • Limited Liability:

The liabilities of the Producer Company members are limited, and their personal assets are not allowed to cover up the losses and the debt of the company.

  • A Separate Legal Entity:

Same like a private limited company, a registered producer company is also regarded as a separate legal entity which can buy or sell land in its own name.

  • More Credibility:

More credibility is provided to the registered producer companies when compared to the non-registered companies.

  • Ease To Manage:

An applicant of the producer company can make desired changes in the board of management by filling up a few simple forms and submitting to the registrar of Companies (ROC)

All these advantages make the farmer producer company registration process more beneficial for all the farmers or primary producer in India. This could help the farmers in more production and better credit utilization; therefore it results in more profits for their farming produce. Altogether Producer Company is bliss for all the primary producers or farmers in India.

Checklist to form a Producer Company in India

  •  A minimum of 5 directors and 10 members are required to incorporate the company.
  • The minimum paid-up capital needed to register a company is about Rs 5 lakhs or more.
  • No limit for the maximum number of members required to incorporate a producer company
  • This type of company cannot be  considered or registered as a Public Limited Company
  • The producer company can only own equity share capital
  • The company should conduct 4 board meetings every year, and it should happen in every three months

Other Mandatory Requirements to register a Producer Company

Below are some additional mandatory demands for farmer producer organization registration process:

  • Only one individual or a member can be engaged in farming activities which are related to the production of primary produce and can participate in the ownership of the company.
  • All the members of the company should be primary producers
  • The liabilities of the members of the producer company formation are limited to their unpaid share amount
  • The name of the proposed company should have ‘Producer Company Limited” at the end of the name of the company.
  • As per the provisions of the Companies Act, the proposed Producer Company is viewed as the private limited company

 

Rules and Regulations for Easy Availability of Loans and Credits

The main objective of the producer company is to empower the standard of primary producer’s lifestyle in India. To reach this aim, a special proviso was passed as per that loan would be sanctioned to the respective farmer producers or members of the company through:

 

  • NABARD Loan:

NABARD or National Bank for Agriculture & Rural Development helps the small and regional scale farmers to meet their financial requirements. The members of Producer Company can get loans in the NABARD loan scheme.

  • Credit Facilities:

As per the law the credit facilities would be given to the producers or members of the company for a time period of 6 months or less than 6 months.

  • Loans And Advances:

According to the law, loans and advances would be granted to the members of the company against security for about 7 years or less than 7 years from the date of outlay of the loan.

  • NABARD Loan:

 NABARD or National Bank for Agriculture & Rural Development helps the small and regional scale farmers to meet their financial requirements. The members of Producer Company can get loans in the NABARD loan scheme.

  • Credit Facilities:

 As per the law the credit facilities would be given to the producers or members of the company for a time period of 6 months or less than 6 months.

  • Loans and Advances:

According to the law, loans and advances would be granted to the members of the company against security for about 7 years or less than 7 years from the date of outlay of the loan.

The Activities performed by the Farmer Producer Company

As referred, farmer producer company online registration handles all the production and harvesting activities and also post-harvesting Activities of the farmers.

 

Following are the detail of activities performed By the Producer Company:

 

Processing of crops and farm products:

The producer company starts the activities from the processing of crops that includes various procedures like brewing, drying, preserving, venting, distilling, canning and packaging.

 

Manufacturing of crops and farm products:

Manufacturing process includes the production on a large scale with the help of the high tech farming machines. Then they also supply and sale the necessary types of machines and equipment for better results and manufacturing.

 

  • This company also educate the low scale farmers on how to use the new technologies in farming, this way the assistance and guidance are offered to the farmers in the right time so it will help them to grow the crops and do farming activities in better ways.
  • The company also educates the members of farmer Producer Company about the mutual assistance principle.
  • Provide various farming-related services such as consultancy, technical, training and other activities which help them to promote their farming activities, the above-mentioned services are done as per the requirements and the interest of the producer.
  • Insurance of the primary production and producer
  • Making a point to render, transmit and distribute power and best usage of water and land resources.
  • The producer Company in India promotes various farming techniques related to mutuality and mutual assistance
  • Financial guidance and assistance to the members of the Producer Company for marketing, procurance or other activities.

Attention:

According to the Companies Act, 1956, ‘Primary production is the product arising from the agricultural land of a farmer such as floriculture, horticulture, animal husbandry, re- vegetation, viticulture, bee raising, forest products, forestry, and farming products.”

Documents needed for Producer Company Registration in India

  • Passport-sized photos of all directors and shareholder of the Producer Company
  • PAN Card or Passport or Election ID Card
  • Voter’s ID or Passport or Driver’s License
  • Latest Bank Statement or Telephone or Mobile Bill

Documents needed for Proposed Registered Office (Residential Or Commercial)

  • Copy of Rent agreement along with NOC from the owner of the place
  • Copy of any type of Utility bills such as electricity bill
  • If it is own Property then a copy of Property Papers.

Registration Procedure of Farmer Producer Company in India

According to the rules and regulations of the ministry of corporate affairs, the registration process of Producer Company is the same as a Private limited company.

  • The procedure starts with applying and obtaining a DSC or Digital Signature Certificate and DIN or Director’s identification number for all the directors of the producer company.
  • Checking name availability and Applying for the name availability for the company.
  • Drafting of MoA, AoA & other required documents and Filing of the EMOA and EAOA to register a Producer company
  • Applying for the PAN and TAN of the registering company
  • Certificate of incorporation will be granted by RoC with PAN and TAN
  • Opening a current account on the company name in an authorized bank
  • Actually, it would take about 7-15 days for the verification process of documents. If all the submitted documents are as per the requirements of ROC, the incorporation certificate of the producer company would be issued.