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Producer Company Registration

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WHAT IS PRODUCER COMPANY?

Producer companies are those companies that are registered with the main activity of producers. They are a body corporate registered to carry on the following all objects or anyone amongst them:

  • Production
  • Harvesting
  • Procurement 
  • Grading
  • Pooling
  • Handling, marketing or selling 
  • Export or import of certain goods, services and primary production of its members

Producer Company combines the nature of both, a private company as well as any cooperative society. It is a hybrid form of structure.

PRODUCER COMPANY AS PER COMPANY ACT, 2013

As per section 465 of Companies Act, 2013, provisions of Part XI A as per Companies Act, 1956 for Producers Company has not been revoked and it is applicable to the Producer Company in the same manner as if the Companies Act, 1956 and the Registration of Companies (Sikkim) Act,1961 has not been repealed.

Thus, there are no new provisions or act which governs Producer Company and therefore is regulated under old companies act, i.e. Companies Act, 1956.

WHO CAN FORM THE PRODUCER COMPANY?

Producer Company can be incorporated by the following:

  • Ten or more individuals, each one of them being a producer;
  • Two or more producer institutions;
  • Combination of above, i.e., ten or more individual & two or more Institutions.

STEP-BY STEP PROCESS FOR APPLYING ONLINE FOR INCORPORATING PRIVATE LIMITED COMPANY

Reservation Of Name

  • The first and foremost step for the incorporation of a Producer Company is started by applying a suitable name for the Company. Name can be applied online through web service available at www.mca.gov.in by using Reserve Unique Name (RUN) service by signing in through workspace service.
  • After receipt of an application by the registrar, if all the information and documents furnished are correct and accurate, the registrar may accept an application and reserve a name for 20 days.
  • A Producer Companies name shall end with words - “Producer Company Limited”

Application For The Allotment Of Director Identification Number (DIN)

  • For allotment of DIN, online application is made to the Central Government in the form of DIR-3 with necessary documents properly scanned as an attachment. Following documents are required to be submitted:
    • Passport size Photograph • Identity Proof • Address Proof
  • Now directors can directly apply for DIN in Form No. INC-32 (SPICe) at the time of the Incorporation of a Company. Maximum three directors can apply for DIN through SPICe forms.

Application for Incorporation

Further after name approval, the next step is to apply for registration of a company. Application for incorporation has to be made online through the MCA portal using three linked forms with the necessary attached documents stated above. It’s a method of incorporating a company with simplicity and easiness (SPICe):

  • Form INC-32 (SPICe)
  • Form INC-33 (SPICeMoA)
  • Form INC-32 (SPICeAoA)

Certificate of Incorporation

  • On and from the date of receipt of the application, Registrar based on information and documents provided will scrutinize the forms. After that registrar will provide a Certificate of Incorporation (CoI) if all the necessary details are accurate.
  • COI shall mention the Date of Incorporation as well as Permanent Account Number (PAN).
  • After the incorporation company is expected to keep and maintain copies of all the necessary documents in a registered office.

DOCUMENTS REQUIRED

Necessary information and/or documents are needed to be submitted online through these forms stated above are:

  • Memorandum of Association (MoA) & Article of Association (AoA) with brief details of the Company Name, Capital, Registered Office signed by all the subscribers or promoters.
  • A duly signed declaration that has to be given by an advocate, Chartered Accountant, Cost Accountant or Company Secretary in Practice.
  • An affidavit in form INC-9 which is a declaration by subscribers and first directors which state no- conviction of any offense and/or they are not found guilty of any fraud/ misfeasance/or any breach of duty.
  • Address of its registered office where it has to be situated
  • Complete details of each subscribers and first directors such as Full Name, Fathers Name, DIN number (If already allotted to them), Date of Birth, Present Address, Permanent Address along with Address proof such as Electricity Bill, Bank Statement, or any Mobile bill (Any One amongst these three), and Identity Proof such as Voter ID, Passport or Driving License (Any One amongst these three).

If any of the directors already hold directorship in any other company apart from the Proposed Company in which being appointed, such interest in other entities has to be attached as a declaration.

OBJECTS OF THE PRODUCER COMPANY

A Producer Company is a body corporate that should be registered with any of these following activities as its main and/or ancillary objects:

  • Providing education to its members,
  • Providing technical, consultancy services, along with research, training & development and other similar activities for the benefit of its members,
  • Generation, transmission & distribution of electric power,
  • Use & conservation of land and water and related activities communication to producers
  • Providing financial assistance to its producer members by extending credit facilities along with financing of procurement, processing, and marketing.
  • Provide insurance to its primary producers.
  • Measure for the welfare of its members who are primary producers.

FEATURES OF PRODUCER COMPANY

  • The owner has to be engaged or must be connected to the activities which involve carrying on the activities related to primary produce. 
  • Members have to be "primary Producers"
  • If the company is registered as a Limited Liability Company, the liabilities of the members are limited to any unpaid amount on shares. 
  • All the names of the Producer Company shall end with “Producer Company Limited”.
  • Producer Company has to comply with all the provisions of law similar to that of any Private Limited Company, along with certain other provisions of part XI-A. 
  • Company has to be registered with Minimum Ten members
  • There is no limit to the maximum number of members of producer Companies.
  • There can be Minimum 5 directors but not more than 15 directors can be appointed by a Producer Company.
  • The board meeting has to be held in a similar way of Private Limited Company i.e., once every 120 days with at least four meetings in a year.
  • Producer Company has to appoint Whole-Time Company Secretary if the average of its annual turnover of proceeding three financial years exceeds INR 5 crore.  
  • Only Equity Shares can be issued by the Producer Company. That means its share capital should consist of entirely an equity share capital.
  • Producer Company can be incorporated with a minimum capital of Rs.5,00,000/- 

Frequently Asked Questions

  • 1. What are the provisions for audit for Producer Company?

    As per its article of association, the Producer Company needs to get its accounts audited by the internal auditor regularly.

  • 2. When the name of the producer company will be struck off?

    If the producer company fails to start its business within one year of its registration, its name will be struck off from MCA by the registrar.

  • 3. What is the financial assistance provided by the Producer Company?

    A producer company provides following assistance to its members: (a) Credit Facility (b) Loans & Advances (c) NABARD Loans

  • 4. Which form is filed for registering of Producer Company?

    The producer Company is incorporated in the same way as any Private Company. Form SPICe is filed for incorporating Producer Company.

  • 5. What are the Tax Benefits of Producer Company?

    Agricultural income is exempted under section 10(1) of Income Tax Act, 1961. But, the exemption sometimes varies based on the agricultural activity carried out.

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