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Producer Company Registration

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Producer Company Registration

What is a Producer Company?

Producer Company is a company registered under the Companies Act, 1956 and having object or objects to promote the interest of its members as producers.

The producer member means any person who is engaged in the production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce or production of goods or rendering of service or business relating to such primary produce.

A Producer Company must have a minimum of 10 individual members or 2 or more producer institutions as its members.

Incorporation legalities for incorporating Farmer Producer Company in India

Producer Company Registration is a form of incorporated association allowed by the Companies Act of 2013 under Section 465. A Producer Company is a legal entity registered under the Companies Act of 1956 and enjoys the status of a limited liability company. It comprises primary producers as its members who may be individuals, institutions or organizations holding shares in the company. As per Section 465(2)(a) of the Companies Act, 2013, there are certain conditions for registration:

  • A minimum number of 10 producers and maximum number of 2000 producers can constitute a company.
  • A producer company has to be registered as an incorporated company which can be deemed as either a private or public limited company.
  • A producer company cannot commence its business operations until it obtains Certificate of Incorporation from the Registrar of Companies (ROC).

Some of the fundamental benefits of the Farmer Producer Company:

  • The farmers can become shareholders in the company and have a bigger say in the decision making process. 
  • The Farmer Producer Companies are able to get finance at a lower rate by virtue of getting collateral-free loans from banks. 
  • The Farmer Producer Companies can enter into backward and forward linkages with food processing companies, exporters, etc. This will help them to get better value for their produce and also make sure that their produce finds a market. 
  • They can also receive a higher price for their produce in case they are able to get private partnerships with big corporations like Walmart or ITC.

Documentation required for incorporating Producer Company:

The documentation required for incorporation of a company depends upon the number of subscribers and the type of company (whether public or private).

  • A company can be registered only as a private limited company. The documents required are:
  • Identity proof – PAN card; address proof – electricity bill, Aadhaar Card, bank statement, passport etc.; photograph.
  • Form INC-1 – Memorandum of Association and Articles of Association duly signed by all proposed directors and subscribers.
  • And Form INC-9 – Particulars of Directors’ meeting for appointment as first directors to manage the affairs of the company till Board constitutes itself pursuant to Section 152 of Companies Act 2013 (CA 2013).
  • Form DIR-12 – Consent to act as director along with self-attested photograph and DIN form.

How long it will take to incorporate a producer company?

As a producer, you have the right to form a company and receive recognition as a Producer Company. Being a producer company, you will benefit from several financial and legal benefits that are not otherwise available.

But how long will it take to incorporate a Producer Company?

  • At this stage, the first thing to do is to form an association of producers. The association needs to be registered under any of the State Co-operative Societies Acts or in any other law. Alternatively, it can also be registered as a company under Section 8 of the Companies Act, 2013.
  • This association then has to file an application for registration with the Registrar of Producers’ Companies under Section 581B(1) of the Companies Act.
  • The Registrar will register the application if he is satisfied that the conditions mentioned in Section 581C(1) are fulfilled by the applicant association. These conditions are listed below:
  • The minimum number of persons required for forming a company (100 or more in case of primary agriculture produce and 50 or more in case of any other produce) have been associated for producing primary agriculture products or for any other purpose related to their production or marketing;

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