Procedure For Producer Company Registration
In this blog we will introduce the Procedure For Producer Company Registration is secured by the group of farmers seeking to improve their lives and financial well-being through collective efforts. It is acknowledged as the hybrid of a private limited company and cooperative, making it a robust and stable business structure. Unlike cooperatives, the producer company reinforces augmented service life, limited liability, hassle-free decision-making, and zero conflict among members. Transforming into a producer company requires following a producer company registration procedure and securing a permit from the governing authority. Let’s delve into the same and discuss some other key aspects.
Governing Legislation of Farmer Producer Company
A Producer Company is a group of farmers and agricultures. It helps them achieve their financial goals, leading to a better lifestyle and improved well-being. Such companies fall under the Companies Act 2013, which enables democratic governance principles, allowing each member to partake in key management affairs and decision-making irrespective of their shareholding threshold. Such companies are governed by the provisions of Section 465 of the Companies Act, 2013, and subjected to the norms available under Part IX A of the Companies Act, 1956.
Objectives served by the Farmer Producer Company
Before we delve into the producer company registration procedure, let’s have a walk-through of common objectives served by the farmer producer company.
Agricultural Advancements
Strengthening the production, harvesting, grading, and marketing of crops- either domestically or globally. Also, it allows for hassle-free import of agri-based resources and services that help farmers boost the quality and production of their produce.
Processing and Preservation
Elevating and improving processing activities like preservation, drying, distilling, brewing, venting, and canning of farmers’ produce through the facilitation of apt resources and extended markets.
Equipment and Consumables Supply
Ensuring availability of machines and equipment that ensure increased and quality production of farmers’ produce.
Educational Initiatives
Offering apt training to members with a major emphasis on collective effort and working.
Technical and Consultancy Services
Rendering technical support, training, and R&D to enhance the members’ skills and understanding in respective agriculture settings.
Energy and Resource Management
Augmenting power generation and distribution with an increased focus on strengthening sustainable management of land and water resources.
Insurance Services
Offering insurance products to provide all-encompassing protection to farmer’s produce.
Member Welfare
Enabling members to reinforce welfare-related measures and facilities.
Ancillary Activities
Promoting ancillary activities are dedicated to strengthening the notion of mutuality and collective working.
Financial Support
Ensuring credit availability to support agri-based endeavors so that farmers can seamlessly grow and sell their produce without any obstacles.
Membership Structure of Producer Company
- A producer company’s membership is not accessible to producer entities or primary producers.
- Membership is reinforced through the purchase of a certain quantity of shares.
- The producer company is helmed by its members to its entirety with no scope for outsider intervention. In a nutshell, the fate of the producer company is in the hands of its members.
- No decision can come into effect unless it has been talked out and approved by the members in the general meetings.
Governance Structure of a Producer Company
- A Board of Directors helms the producer company and reins its management.
- The board is formed by the mutual consent of the members in a general meeting.
- The Board should have at least 5 directors, each director is committed to 5 years of service tenure.
- Directors can serve up to two consecutive terms provided the board has no second thoughts.
Basic legalities to form a Farmer Producer Company
Minimal Capital Requirement: The minimum paid-up capital and minimum authorized capital to form a producer company in India has been capped at Rs 1 lakhs and Rs 5 lakhs, respectively.
Flexibility in Membership: At least 10 members are required to constitute a producer company in India. There is no higher limit in this context.
No Government or Private Equity Stake: Such companies are not entitled to secure government or private equity stakes, undermining their chance to transform into a public limited entity.
Procedure for Producer Company Registration: A Step-by-Step Guide
The section below discusses the Procedure for Producer Company Registration in a detailed and step-wise manner.
Step 1: Obtain a Digital Signature Certificate (DSC)
Securing DSC is the first step in the Procedure for Producer Company Registration. The MCA-certified agencies in India grant the DSC against the prescribed application and the following paperwork:
- PAN Card of the Director
- Aadhaar Card a Director
- Recent Photograph
- Email ID
- Contact Number
Step 2: Obtain Director Identification Number (DIN)
Upon securing the DSC, proceed to apply for the Director Identification Number (DIN) for director(s). It boasts a code that serves as a unique identifier for each director. You can apply for DIR either via form DIR-3 or the SPICe+ application. Whatever form you choose to submit, you must attach the same with common dossiers like Address process, ID, and recent photograph.
Step 3: Name Reservation
When you are done securing DIN, it is time to reserve a legal name for your company. You can serve this purpose by filing a SPICe+ form that consists of two parts- Part A and Part B. Part A helps with name reservation and Part B renders a slew of services, including the grant of DIN, EPFO, GSTIN, etc. While applying for name reservation via Part A, you can suggest up to two proposed names, one of which will be approved by MCA after validation.
Step 4: Preparation of Essential Documents
After name approval, the next step is to arrange mandatory paperwork as shown below:
Memorandum of Association (MoA): This document pens down the company’s objects, rules, and objectives.
Articles of Association (AoA): This document boasts the by-laws that lay down the foundation of the company’s management and operational affairs.
- Form INC-22 for the Registered Office
- Form DIR-12 for Directors Appointment
Affidavit: File Affidavits (if necessary): File Form 7 if any of the subscribers signed the MoA in Hindi. The affidavit for the same must be drafted and duly signed by the subscribers.
Execute Power of Attorney: Execute a Power of Attorney in favor of a person who will make changes in charter documents as and when required.
Registered Office Proof: If one of the directors owns the business place/registered office, submission of the NoC and utility bill becomes complusory. If the office is rented, a lease agreement and an NOC must be submitted.
Step 5: Filing of Incorporation Application
Upon arranging the documents, proceed to file the SPICe+ application on the MCA website. It is vital to stay vigilant while filling out the application as any error or discrepancy can lead to application rejection.
Step 6: ROC Verification and Certificate of Incorporation
The ROC shall thoroughly vet the application and documents for compliance with underlying norms. If the application and paperwork come out clean, the RoC shall grant the Incorporation Certification, reinforcing the new legal identity of the company.
Conclusion
Forming a producer company is the first step toward mutual empowerment and financial well-being for farmers. Opting for this business structure can help farmers reap numerous benefits including access to hassle-free credit, advanced technology, and a global market. By following the aforementioned Procedure For Producer Company Registration, you can legally constitute the entity in no time. However, if you come across any legal hindrances, feel free to connect with Adviso’s professionals.
