People in India are both, directly and indirectly, reliant on the agriculture sector. India is the world’s largest agricultural producer, yet due to outmoded practices unstructured infrastructure, and outdated technology, it falls short of its full potential. This results in crop failure, which is the primary cause of farmer suicide. In response to this issue, the Indian government established an expert group to address all of the issues facing farmers. In India, a Producer Company is a business incorporated under the Companies Act with the shared goals of producing agricultural products, buying them, carrying out post-harvest processing tasks, importing commodities, selling them, and exporting the members’ primary production in order to increase profits. In this article, we will discuss the Producer Company Registration process in India.
What is a Producer Company?
An organization called a “Producer Company” is one that was established with the intention of producing, harvesting, acquiring, grading, pooling, handling, promoting, and selling the primary products of its members or importing goods or services for their advantage. Things that have been created or cultivated, particularly through farming, are referred to as “products.” This indicates that a Producer Company mostly engages in agricultural production and post-harvest processing operations.
Advantages of Producer Company Registration
The following are some advantages of Producer Company Registration;
A production firm would fall under the definition of a separate legal entity. Members’ and directors’ liability is constrained to a certain amount of capital when a business is registered as a producer company. This capital represents the amount of unpaid capital pertaining to the company. The personal assets of the members and directors will not be pursued by any third parties for any obligations owed by the firm.
One of the main benefits of this business type is the idea of restricted liability. This concept limits the company’s responsibility to a specific amount. Members’ accountability is also limited.
By establishing a producer company, the members also benefit from increased openness and reliability. Additional advantages include increased access to technology, digitization, and initial funding methods. The general public would also consider this type of firm to be reputable enough to invest in.
Developing Management is Easy
When compared to other business models, establishing the management in the firm is straightforward. According to the act’s requirements, the corporation must have members and directors. The Registrar of Companies must be provided with all information pertaining to management (ROC).
Condition for establishing a Producer Company
The following are a few conditions for establishing a Producer Company;
- A Producer Company can be created by producers numbering ten or more.
- A combination of at least 10 producers and producer institutions, or two or more producer institutions.
- A Producer Company must have a minimum capital of Rs. 500,000 to be incorporated.
- A Producer Company may only issue equity shares as its share capital.
- A Member’s shares in a Producer Company must be proportional to the company’s backing.
- A Producer Company should have a minimum of 5 directors and a maximum of 15 directors.
- The board should pick a chief executive officer (CEO) who works full-time.
- There is no upper restriction on the number of members.
Documents Needed for Producer Company Registration
The following is a list of the documents required to form a Producer Company:
- From each and every director and stockholder:
- A form of identification such as a passport, voter ID card, or PAN card;
- Address proof
- A replica of the most recent bank statement;
- Utility bills, such as telephone, mobile, or electricity bills;
- Passport-sized photos of each Director and Shareholder;
- Any other evidence that a person is a serving member, such as a Sarpanch Letter, Khasra-Khatuni, an ITR with Agriculture Incomes, etc.
In relation to the Potential Registered Office:
- A copy of a recent utility bill, preferably from within the last two months.
- Scanned copies of the rent agreement and the real owner’s NOC (No-Objection Certificate)
- If the aforementioned property is owned, the ownership records or the sale deed for it should be provided.
The procedure of Producer Company Registration in India
The steps involved in the process of registering a Producer Company are as follows:
Step 1: Name Approval
Following the aforementioned stage, the producing company’s name approval procedure must be started. By submitting an application to the MCA (Ministry of Corporate Affairs) and the ROC, the name approval procedure can be started. To accomplish this, take into account the RUN process (Reserve Unique Name). The ROC and MCA will check the name’s availability after this step is completed. If the name is available, the applicant must begin the process of obtaining the certificate of incorporation within 20 days of submitting the application.
Step 2: Obtain DSC and DIN
The candidate must submit an application to get the digital signature certificate in the first phase. The applicant is permitted to use any type of electronic or digital signature with the digital signature certificate. Application for a Director Identification Number is also required from the applicants. The SPICe form must be carried along with everything mentioned above.
Step 3: MOA and AOA drafting
The next stage is to take the necessary actions to draught the articles of association and the memorandum of association. Following the submission of the papers with the SPICe Form, this is required. The members of the firm must sign and produce an affidavit stating the same and their intention.
Step 4: Certificate of Incorporation
A Certificate of Incorporation (COI) is issued by the ROC following the verification of the submitted documents and incorporation application.
In 2002, the idea of a Producer Company was introduced with the urgent concerns of farmers and other agriculturalists—collectively known as producers—in mind. A Private Limited Company’s application process in India is substantially similar to that of a Producer Company Registration. The Government of India has made the incorporation process much simpler than in previous years in an effort to speed up the Ease of doing business. Reach an expert at Bizadvisors.io for Producer Company Registration.