Producer Company is a company registered under the Companies Act, 2013, which has the objective of production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit. Produce are things that have been produced or grown, especially by farming. Therefore, a Producer Company deals primarily with agriculture and post harvest processing activities.
Over 85% of the Farmers in India are small and marginal farmers with land holdings of less than 2 hectares. This fragmentation in farmers and farm lands, leads to disorganization and it is not viable for Indian farmers to adopt the latest technologies. By organization of these farmers into producer companies, economies of scale can be unlocked and the livelihood of farmers can be improved. Thus the concept of producer company is aimed at empowering farmers by creating clusters of farmers organized as a Producer Company.
Documents required for Producer Company Registration
Digital Signature Certificate (if you already have it)
Director Identification Number (if you already have it)
Memorandum of Association
Articles of Association
ID proof for members(Aadhar Card, Passport, Voter ID)
Passport size Photographs
Director’s details (if Members are other Companies/LLPs)
Advantage of Producer Company Registration
No Minimum Share Capital Requirement
Easy Transfer of Ownership
No need to use “Section 8” or “Limited” title
No Stamp Duty
Clear Objectives for easy donations and loans
Easy to Manage
Exemptions and Privileges under Companies Act, 2013
Relaxation in Compliances
Separate Legal Entity
A producer company is a legal entity and a juristic person established under the Act. Therefore, a producer company has wide legal capacity and can own property and also incur debts. The members (Directors) of a producer company have no liability to the creditors of a producer company.
The Board of Management of a producer company can be easily changed by filing simple forms with the Registrar of Companies. The Board of Management of a producer company controls the activities of the producer company.
A producer company being a juristic person, can acquire, own, enjoy and alienate, property in its own name. No member can make any claim upon the property of the producer company as long as it is a going concern.
A producer company has 'perpetual succession', that is continued or uninterrupted existence until it is legally dissolved. A producer company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.
A producer company enjoys better credibility when compared to unregistered producer organizations. Producer companies are registered and monitored by the Central Government. Producer Organization are on the other hand governed and monitored by State Governments.
First of all, the partners have to apply for Digital signature and DPIN. Digital signature is an online signature used of filing and DPIN refer to Directors PIN number issued by MCA. If the directors already have DSC and DPIN, then this step can be skipped.
Step 2. Name approval
You need to provide 3 different options for your company name to MCA of which one will be selected. Names provided should ideally be unique and suggestive of company business
Step 3. Approval of other Authorities
The Registrar of Companies may require the applicant to furnish the approval or concurrence of any department,regulatory body, appropriate authority, or Ministry of the Central or State Government(s) in relation to the work to be done.
Step 4. Obtaining Section 8 Company Licence
After the company’s name is approved, one needs to apply for a Section 8 Company licence from the MCA.The Registrar will wait for 30 days for objections, if any, of any person pursuant to notice published in newspapers.The Registrar might also consult any other regulatory bodiesandnecessary authorities.
Thereafter, the Registrar of Companies may,at its discretion, grant the licence with or without certain conditions. The Registrar may direct the company to insert in its memorandum, or in its articles, or partly in one and partly in the other, such licencing conditions as may be specified by the Registrar in this behalf.
Step 5. MOA & AOA submission
Once the licence is obtained, one needs to draft Memorandum of association and Articles of Associate. But the object of the company must always be a charitable object. Both MOA and AOA are filed with the MCA with the subscription statement.
Step 6. Get Section 8 Company incorporation certificate
It typically takes 15- 25 days to form a Section 8 company and get the incorporation certificate. The Certificate of Incorporation is proof that a company exists. It also includes your CIN (Company Incorporation Number).The Registrar will wait for 30 days for objections, if any, of any person pursuant to notice published in newspapers.The Registrar might also consult any other regulatory bodies and necessary authorities. Thereafter, the Registrar of Companies at its discretion, may grant the licence. And such licence may contain conditions as deemed necessary by the Registrar.
Step 7. Apply for PAN, TAN and Bank account
Then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days. Post this, you can submit the Incorporation certificate, MOA, AOA and PAN with bank to open your bank account.
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