Producer Company Registration

Producer Company is a distinct category of an organization that is designed purposely for the farmers or for the people indulged in primary production. In this model, shareholders are restricted to primary producers (farmers and the like).

A primary producer is any person who is:

1.         Animal husbandry – the care and breeding of animals.
2.         Horticulture – the cultivation of fruits, vegetables, and flowers.
3.         Floriculture – growing flowers.
4.         Pisciculture – fish farming.
5.         Viticulture – producing grapes.
6.         Forestry – caring for the nation’s trees and forests.
7.         Re-vegetation – planting out after clearing.
8.         Bee-Keeping – the breeding of bees for the purpose of honey.

Other activities such as handicrafts, handloom etc. can also form part of the activities of a producer company.

Farmers prefer this model because:

1.         A Producer Company may work throughout India unlike a cooperative society which within only one state.
2.         It has less government meddling in day-to-day operations.
3.         It can also mobilise funds from banks and financial institutions for its own operations.

Objectives of Producer Companies

Some of the primary targets for establishment of a Producer Company are stated below:

1.         Kipping, harvesting, grading, pooling, selling, marketing, and exporting the farm produce of members.
2.         processing and/or the packaging process are drying, preserving, brewing, venting, canning.supp.306 etc.
3.         Supplying machinery and consumables to members.
4.         Educating the public and industry regarding mutual aid concepts.
5.         Proving technical, consultancy, training and R&D services to members.
6.         Managing power, land, and water resources as instruments of agriculture.
7.         Insurance for members and their crops.
8.         Implementing measures for the welfare of the members.
9.         Extending to secure members loans, credit facilities and financial assistance.
10.         That the company primarily deals in the products of its members in good standing.

Features of a Producer Company

Some of the salient features of the Producer Companies are as under:

1.         It is registered as a Private Limited Company in.
2.         It can also be more than 50 members, unlike a typical private company.
3.         Need at least 10 individual producers or 2 producer organizations to get this going.
4.         It must have at least 5 but not more than 15 directors.
5.         Can’t be converted into any other form like Public Limited, LLP, etc.
6.         Shall have “Producer Company Limited” as part of its name.
7.         Must have paid-up capital of ₹5 lakhs.
8.         Based on “One member – One vote” i.e. Nominal Member or Shareholder matters.

Why Choose a Producer Company?

Producer Companies have several advantages from the government:

1.         Also, you have access to the Central government and State government schemes such as Rashtriya Krishi Vikas Yojana and National Food Security Mission.
2.         Equity Grant Scheme – Producer Companies receive a maximum of ₹10 lakhs to add to their capital base.
3.         Credit Guarantee Fund (CGF) – 85% towards loan guarantee to Banks lending to Producer Committees.

Producer Companies—Benefits to Members

1.         Members get fair value for what they bring to us.
2.         Any held price is later distributed in cash or stock.
3.         Members make a small return and also get bonus shares.
4.         Any profits in excess of allowable margins are passed on to members as a patronage refund according to their level of participation.

Eligibility For Producer Company Registration

The following conditions are to be satisfied to register a Producer Company under the Companies Act, 2013:

1.         Minimum 5 directors are required.
2.         At least 10 members are required.
3.         Or 2 producer organizations may merge and create one.
4.         Minimum paid up capital) shall be ₹5,00,000.
5.         A Producer Company is not enA Producer Company can not be a public limited company.

Appointment of Directors

1.         5–15 directors (except that in the case of inter-State cooperative societies a larger number is permissible for 1 year).
2.         Directors are elected from the members who signed MOA and AOA.
3.         Elections are to be held within ninety days of incorporation.
4.         Directors can hold office from 1 to 5 years and are eligible for reelection.
5.         Expert directors may, however, be appointed by the Board and they may not elect the Chairman.

Documents Required for Producer Company Registration 

The below mentioned need to be filed with the MCA:

1.         Self-attested PAN card
2.         Passport-size photograph
3.         Proof of ID – Driving License/Passport/Voter ID
4.         Proof of Address – Bank Statement / Telephone Bill / Electricity Bill
5.         Address proof – Rent Agreement + NOC (if not in your name)

Procedure of Registration of Producer Company in India

The how to guide with GarudaMudra is :

1.       Select an original name for the company.
2.       Popular on MCA siteTo reserve name through RUN application in MCA site.
3.       Get DSC and DIN for directors.
4.       Draft the MOA and AOA.
5.       Now process incorporation application with MCA fill up online.
6.       The application is passed for review and approval to MCA.

Investment from General Reserves

These reserves can be utilized by a Producer Companies invets :

1.         Government-approved securities, bonds, or deposits.
2.         Cooperative or scheduled banks.
3.         Public financial institutions.
4.         Stocks or shares or securities of co-operative societies.

Producer Company Compliances

Each Producer Company has to internally audit its account by a Chartered Accountant.

Auditor’s role includes checking:

1.         Outstanding debts and bad debts.
2.         Cash balance and securities.
3.         Assets and liabilities.
4.         Loans given to directors.
5.         Donations or contributions made.
6.         Any irregular transactions.

How GarudaMudra Can Help

We at GarudaMudra support you fully in Producer Company Registration in India. Our services cover:

1.         Company name research and reservation.
2.         Obtaining DSC and DIN for directors.
3.         Drafting MOA and AOA.
4.         Filing incorporation application.
5.         Chasing MCA for clearance.

Your registration with the CA/CS who can make the entire process hassle free, can help your ProCo up and running.