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Overview

Producer Company Registration in India

A Producer Company is a specialized type of company in India designed to benefit farmers and agricultural producers. It was introduced under the Companies Act, 1956, and is now governed by the Companies Act, 2013. The primary goal of a Producer Company is to support the collective interests of its farmer members, which can include activities such as production, harvesting, procurement, processing, pooling, marketing, selling, and exporting primary produce. A Producer Company combines the benefits of a corporate structure with the cooperative principles, allowing farmers and producers to pool resources, gain better market access, and improve their bargaining power.

Why Registration is Important

  1. Collective Bargaining : Enhances the producers' bargaining power, ensuring fair prices and better market access.
  2. Limited Liability : Limits members’ liability to their shares, protecting personal assets from business liabilities.
  3. Government Support : Provides access to various government subsidies, grants, and schemes designed to promote agricultural and rural development.
  4. Separate Legal Entity : Allows the company to own assets, enter contracts, and operate independently of its members.
  5. Perpetual Succession : Ensures that the company continues to exist regardless of changes in membership, providing stability.


Documents Required

To register a Producer Company in India, the following documents are generally required

For Directors and Shareholders

For Registered Office

Additional Documents



Procedures

The procedure to register a Nidhi Company in India involves the following steps

  • DSC
    Obtain Digital Signature Certificate.
    The proposed directors must obtain a DSC, which will be used to sign electronic documents.
  • DIN
    Obtain Director Identification Number
    Apply for DIN for all proposed directors using the SPICe+ form.
  • Name Reservation
    Name Reservation
    File the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) Part A form to reserve a unique name for the Producer Company.
  • MOA and AOA
    Drafting of MOA and AOA
    The Memorandum of Association (MOA) should specify the company’s objectives related to primary produce. The Articles of Association (AOA) outlines the company’s rules and governance structure.
  • Filing of Incorporation Forms
    Filing of Incorporation Forms
    Complete SPICe+ Part B for company incorporation, providing details of the company's directors, shareholders, and registered office.
  • Certificate of Incorporation
    Obtain Certificate of Incorporation
    Once all the documents are verified, the Registrar of Companies (ROC) issues the Certificate of Incorporation, officially recognizing the Producer Company.
  • Apply for PAN and TAN
    Apply for PAN and TAN
    The company automatically receives its PAN and TAN along with the Certificate of Incorporation.
  • Commencement of Business
    Commencement of Business
    After incorporation, the company can start its business operations in accordance with its objectives.
  • Producer Company Norms
    Compliance with Producer Company Norms
    The Producer Company must comply with specific norms regarding the distribution of profits, member participation, and management.


Features

Features & Benefits of Producer Company in India

Minimum 10 Producers
A Producer Company must be formed by at least 10 individual producers (farmers) or two producer institutions.
Prev Next
Separate Legal Entity
The company is a separate legal entity, distinct from its members, offering limited liability protection.
Prev Next
Primary Produce Focus
The company’s objectives must focus on activities related to primary produce, such as production, harvesting, procurement, and marketing.
Prev Next
Profit Sharing
Profits are distributed among members based on their participation in the business.
Prev Next
Limited Liability
Members have limited liability, meaning their personal assets are protected from business liabilities.
Prev Next

Producer Company Registration in India

Perpetual Succession
The company continues to exist regardless of changes in membership.
Prev Next
No Minimum Capital Requirement
There is no statutory minimum capital requirement, but adequate capital must be maintained to meet the business’s needs.
Prev Next
Government Benefits
Producer Companies are eligible for various subsidies and grants provided by the government to promote agricultural activities.
Prev Next
Democratic Governance
A Producer Company is managed democratically, with each member having equal voting rights regardless of their shareholding.
Prev Next
Membership Restriction
Only producers or producer institutions can become members, ensuring that the company remains focused on its core objective of benefiting agricultural producers.
Prev Next


Comparison between Producer Company,Cooperative Society And Private Limited Company

Features Producer Company Cooperative Society Private Limited Company
Legal Status Separate Legal Entity Separate Legal Entity SSeparate Legal Entity
Membership Minimum 10 producers Minimum 10 members 2-200 shareholders
Objective Agricultural and related activities Mutual benefit of members Any lawful business activity
Profit Distribution Based on participation Based on participation and equity Based on shareholding
Regulatory Authority Ministry of Corporate Affairs (MCA) State Cooperative Department Ministry of Corporate Affairs (MCA)
Liability Limited to the extent of shares Limited or Unlimited (as per state laws) Limited to the extent of shares
Fundraising Capability Limited to members and grants Limited to members and state funding High (through equity and debt)
Compliance Requirements Moderate Low to Moderate High


Frequently Asked Questions

Who can form a Producer Company?

A Producer Company can be formed by a minimum of 10 individual producers (farmers) or two producer institutions. The members must be engaged in activities related to primary produce.

What are the key objectives of a Producer Company?

The key objectives of a Producer Company include production, harvesting, procurement, grading, pooling, handling, marketing, selling, and exporting primary produce and providing technical services, consultancy, and other necessary support.

How are profits distributed in a Producer Company?

Profits in a Producer Company are distributed among its members based on their participation in the company’s activities, such as the quantity of produce supplied or the level of services utilized.

Is there a minimum capital requirement for registering a Producer Company?

While there is no statutory minimum capital requirement, the company must maintain sufficient capital to meet its operational needs and objectives.

What are the compliance requirements for a Producer Company?

A Producer Company must comply with the provisions of the Companies Act, 2013, including filing annual returns, conducting audits, and holding annual general meetings (AGMs).

Can a Producer Company accept investments from external entities?

No, a Producer Company’s funding is limited to its members, internal accruals, and government grants or subsidies. It cannot accept investments from external commercial entities.

Overview

Producer Company in India

A Producer Company is a specialized type of company in India designed to benefit farmers and agricultural producers. It was introduced under the Companies Act, 1956, and is now governed by the Companies Act, 2013. The primary goal of a Producer Company is to support the collective interests of its farmer members, which can include activities such as production, harvesting, procurement, processing, pooling, marketing, selling, and exporting primary produce. A Producer Company combines the benefits of a corporate structure with the cooperative principles, allowing farmers and producers to pool resources, gain better market access, and improve their bargaining power.

Why Registration is Important

  1. Collective Bargaining : Enhances the producers' bargaining power, ensuring fair prices and better market access.
  2. Limited Liability : Limits members’ liability to their shares, protecting personal assets from business liabilities.
  3. Government Support : Provides access to various government subsidies, grants, and schemes designed to promote agricultural and rural development.
  4. Separate Legal Entity : Allows the company to own assets, enter contracts, and operate independently of its members.
  5. Perpetual Succession : Ensures that the company continues to exist regardless of changes in membership, providing stability.

Documents Required

To register a Producer Company in India, the following documents are generally required

For Directors and Shareholders

For Registered Office

Additional Documents

Procedures

  • DSC
    Obtain Digital Signature Certificate
    The proposed directors must obtain a DSC, which will be used to sign electronic documents.
  • DIN
    Obtain Director Identification Number
    Apply for DIN for all proposed directors using the SPICe+ form.
  • Name Reservation
    Name Reservation
    File the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) Part A form to reserve a unique name for the Producer Company.
  • MOA and AOA
    Drafting of MOA and AOA
    The Memorandum of Association (MOA) should specify the company’s objectives related to primary produce. The Articles of Association (AOA) outlines the company’s rules and governance structure.
  • Incorporation Forms
    Filing of Incorporation Forms
    Once all the documents are verified, the Registrar of Companies (ROC) issues the Certificate of Incorporation, officially recognizing the Producer Company.
  • Certificate of Incorporation
    Obtain Certificate of Incorporation
    The company automatically receives its PAN and TAN along with the Certificate of Incorporation.
  • PAN & TAN
    After incorporation, the company can start its business operations in accordance with its objectives.
    Once all the documents are verified, the Registrar of Companies (ROC) issues the Certificate of Incorporation, officially recognizing the Nidhi Company.
  • Commencement of Business
    Compliance with Producer Company Norms
    The Producer Company must comply with specific norms regarding the distribution of profits, member participation, and management.
  • Producer Company Norms
    Compliance with Producer Company Norms
    The Producer Company must comply with specific norms regarding the distribution of profits, member participation, and management.

Features

Features & Benefits of Producer Company in India

Minimum 10 Producers

A Producer Company must be formed by at least 10 individual producers (farmers) or two producer institutions.

Separate Legal Entity

The company is a separate legal entity, distinct from its members, offering limited liability protection.

Primary Produce Focus

The company’s objectives must focus on activities related to primary produce, such as production, harvesting, procurement, and marketing.

Profit Sharing

Profits are distributed among members based on their participation in the business.

Limited Liability

Members have limited liability, meaning their personal assets are protected from business liabilities.

Perpetual Succession

The company continues to exist regardless of changes in membership.

No Minimum Capital Requirement

TThere is no statutory minimum capital requirement, but adequate capital must be maintained to meet the business’s needs.

Government Benefits

Producer Companies are eligible for various subsidies and grants provided by the government to promote agricultural activities.

Democratic Governance

A Producer Company is managed democratically, with each member having equal voting rights regardless of their shareholding.

Membership Restriction

Only producers or producer institutions can become members, ensuring that the company remains focused on its core objective of benefiting agricultural producers.

Comparison between Producer Company,Cooperative Society And Private Limited Company

Features Producer Company Cooperative Society Private Limited Company
Legal Status Separate Legal Entity Separate Legal Entity SSeparate Legal Entity
Membership Minimum 10 producers Minimum 10 members 2-200 shareholders
Objective Agricultural and related activities Mutual benefit of members Any lawful business activity
Profit Distribution Based on participation Based on participation and equity Based on shareholding
Regulatory Authority Ministry of Corporate Affairs (MCA) State Cooperative Department Ministry of Corporate Affairs (MCA)
Liability Limited to the extent of shares Limited or Unlimited (as per state laws) Limited to the extent of shares
Fundraising Capability Limited to members and grants Limited to members and state funding High (through equity and debt)
Compliance Requirements Moderate Low to Moderate High

Frequently Asked Questions

Who can form a Producer Company?

A Producer Company can be formed by a minimum of 10 individual producers (farmers) or two producer institutions. The members must be engaged in activities related to primary produce.

What are the key objectives of a Producer Company?

The key objectives of a Producer Company include production, harvesting, procurement, grading, pooling, handling, marketing, selling, and exporting primary produce and providing technical services, consultancy, and other necessary support.

How are profits distributed in a Producer Company?

Profits in a Producer Company are distributed among its members based on their participation in the company’s activities, such as the quantity of produce supplied or the level of services utilized.

Is there a minimum capital requirement for registering a Producer Company?

While there is no statutory minimum capital requirement, the company must maintain sufficient capital to meet its operational needs and objectives.

What are the compliance requirements for a Producer Company?

A Producer Company must comply with the provisions of the Companies Act, 2013, including filing annual returns, conducting audits, and holding annual general meetings (AGMs).

Can a Producer Company accept investments from external entities?

No, a Producer Company’s funding is limited to its members, internal accruals, and government grants or subsidies. It cannot accept investments from external commercial entities.

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