Farmer Producer Company

A producer company may be a great idea, if you're a farmer or group of farmers, it's a hybrid or mix-up of personal Limited and Cooperative Society. It is a body corporate having objects or activities as specified under the Act.

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OVERVIEW

Register a Producer Company

A producer company may be a great idea, if you're a farmer or group of farmers, it's a hybrid or mix-up of personal Limited and Cooperative Society. It is a body corporate having objects or activities as specified under the Act. It consists of a gaggle of individuals involved within the production of primary produce or having one or more objectives concerning primary produce. In a producer company, you'll appoint agriculturist members and accept deposits within the type of RD/FD and provide them maturity also as distribute loans to your farmer members and charge interest from them. It Combines the goodness of a Cooperative enterprise and therefore the vibrancy and efficiency of a corporation.

Meaning of Producer Company

- Producer Company is a company or body corporate which is registered under section 465 of the Companies Act, 1956 and shall be engaged in or related to any of the following activities classified broadly:-

- Production, Harvesting, Processing, Procurement, Grading, Pooling, Handling, Marketing, Selling, Export Of Primary Produce Of The Members Or Import Of Goods Of Services For Their Benefit ;

- Rendering Technical Services, Consultancy Services, Training, Education, Research And Development And All Other Activities For The Promotion Of The Interests Of Its Members;

- Generation, Transmission And Distribution Of Power, Revitalization Of Land And Water Resources, Their Use, Conservation And Communications Relatable To Primary Produce;

- Promoting Mutual Assistance, Welfare Measures, Financial Services, Insurance Of Producers Or Their Primary Produce;

Products Majorly Produced

- Produce of farmers

- arising from agriculture (including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, revegetation, bee raising, and farming plantation products), or any other; or

- Produce of persons engaged in handloom

- handicraft primary activity or service which promotes the interest of the farmers or consumers and other cottage industries

- Any product resulting from any of the above activities, including by-products of such products ;

- Any product resulting from an ancillary activity that would assist or promote any of the aforesaid activities or anything ancillary thereto

- Any activity which is intended to increase the production of anything referred to above to improve the quality thereof

BENEFITS

Advantages of Producer Company

The formation of a Producer Company is the golden opportunity for farmers or producers with the following exclusive benefits:-

Producer Company is a Body Corporate and having its identity Separate by law. A Separate Legal entity offering limited liability and perpetuity.

The Government through its organizations offers greater credibility and subsidy benefits to promote the Producer Companies for agricultural activities.

Though the Producer Company is a Body Corporate, the board of management of a producer company can easily and swiftly be made just through a filing in ROC.

A producer Company is entitled to acquire property in its own name and can sue and be sued easily in its own name

Producer Company has the facility of accepting deposits in the form of Recurring Deposits and Fixed Deposits to its farmer members on a reasonable specified interest rate.

Producer Company can provide Loans to its Farmer members at a reasonable rate.

Producer Company can be started with Rs. 5 lakh initial Capital.

REQUIRED DOCUMENTS

Documents required to register a Producer Company

PAN Card

PAN CARD of 10 persons is mandatorily required and in case of the foreign national valid passport also requires.

Proof of Identity

Any proof of identity like Adhaar Card/ voter id card/driving license of all 10 persons is mandatory required

Company Name

The client has to be provided at least two Company names to apply for name approval.

Photo/Mobile Numbers/ Email IDs/ Bank Statements

All the 10 persons must have their photos, mobile numbers, valid emails, and the latest bank statements (must not be older than 2 months).

Office Address Proof

The client has to provide Office Address proof like Rent Agreement/Property papers with the latest electricity bill.

*In case of NRI or Foreign National, documents of director (s) must be notarized.

process

The process to Register Producer Company in India

Name Approval 1-2 Days

  • A client has to provide at least two names out of which one name will be approved by MCA

Digital Signature:(1-2 days)

  • The second process is to apply and approve the digital signature of all 2 members in the Private Limited company.

Application filling and approval for certification: (2-3 days)

  • Our experts will file the complete document with drafted copies of the MOA and AOA of the company. If there is no objection the certificate of incorporation will be issued by the MCA.

Congratulation!

  • work is done
Compliances of Producer Company

1. After registration of the Company, the Appointment of Auditor has complied within 30 days from the date of Incorporation of the Company, and Hence ADT-1 has to be filled with the ROC.
2. The Board shall hold four meetings every year with a gap of not more than three months between two meetings by giving seven days’ advance notice.
3. The Producer Company shall hold an Annual General Meeting each financial year. The gap between the two AGM shall not be more than fifteen months. The AGM shall be called by issuing a minimum of 14 days’ notice.
4. The Producer Company shall hold an Annual General Meeting each financial year. The gap between the two AGM shall not be more than fifteen months. The AGM shall be called by issuing at least 14 days' notice.
A Producer Company shall hold its first annual general meeting within a period of ninety days from the date of its incorporation.
5. Every Producer company is required to file its Financial Statements, along with Notices calling the General Meeting, Directors Report, Auditors Report, and Balance sheet to ROC in Form AOC-4 within 60 days from the date of the Annual General Meeting of the Company.
6. Every Producer company is required to file its Annual Return along with a list of Members of the Producer Company in Form MGT-7 within 60 days from the date of the Annual General Meeting.
7. Every Producer Company shall have an internal audit of its accounts carried out in such intervals and such a manner as specified by its articles, by a Chartered Accountant.

FREQUENTLY ASKED QUESTIONS

Explore Farmer Producer Company

How many members are required to make a Producer Company?

As per section clause (1) of section 581C of the companies Act, 1956, anybody of the next combination can form a Producer Company:
• Any ten or more individuals each of them being a producer
• Or any two or more Producer Institutions
• Or Combination of 10 or more individuals and Producer Institutions

What are the tax benefits available to a Producer Company?

The tax Act, 1961, (“the IT Act”) specifically exempts tax on agricultural income under Section 10(1). However, the exemption for such agricultural income shall sometimes vary depending upon the type of agricultural activity carried on.
It is to be noted that though the IT Act doesn't per-se give any special benefits or exemptions to Producer Companies intrinsically, but depending upon the type of agricultural activity it carries on, certain tax benefits are often availed.
Dividend tax at the applicable rates is required to be paid by the corporate at the time of patronage bonus, limited return distribution and therefore the same is going to be tax-free in the hands of the members.
Bonus shares won't attract any tax within the hands of the members at the time of allotment, however at the time of sale or redemption necessary provision of capital gain tax shall apply.

How many Board Meetings shall hold in a financial year?

As per section 581V of the businesses Act, 1956, meetings of the Board shall be held not but once every three months and a minimum of four such meetings shall be held every year.
The above provisions need clarification and wish to be aligned with Section 173 of Companies Act, 2013 and Secretarial Standard I, as per Secretarial Standard I read with Companies Act, 2013, every company shall hold 4 Board meetings during a civil year and gap between 2 Board Meetings shall not be quite 120 days, just in case of 1 person company and small company are required to hold one Board Meeting in each of calendar year and the gap between 2 Board Meetings shall not be less than 90 days.

What are the provisions with respect to the Annual General Meeting for Producer Company?

As per section 581ZA of the companies Act, 1956, every Producer Company shall in annually, hold, additionally to the opposite meetings, a general meeting, as its annual general meeting and shall specify the meeting intrinsically within the notices calling it, and less than fifteen months shall elapse between the date of 1 annual general meeting of a Producer Company which of subsequent.
The Registrar may, for any special reason, permit extension of the time for holding an annual general meeting (not being the first annual general meeting) by a period not exceeding three months.
A Producer Company shall hold its first annual general meeting within a period of ninety days from the date of its incorporation.
Above clause 2 of Section, 581ZA states that the first Annual General Meeting shall be held within a period of 90 days from the date of its incorporation which is different from the existing Companies Act 2013. As per section 96 of the Companies Act, 2013, the first Annual General Meeting shall be held within 9 months of the close of the first financial year.

Whether shares of Producer Companies are transferable?

A Member of a Producer Company may, after obtaining the previous approval of the Board, transfer the entire or a part of his shares alongside any special rights, to an active Member at par.
Here “active members” means a member who fulfills the quantum and period of patronage of the Producer Company as could also be required by the articles.
In the above provision there's one practical difficulty as if there are only 10 members as needed by the Act and if one among them wants to transfer his shares and as the above provision suggests that the shares can be transferred only to an active member, whether an outsider incoming member can be termed as an active member is the question and if he transfers his shares to existing members then the minimum requirement of members will fall below which is again a default.
Probable resolution – the provision of obtaining the previous approval of the Board for transfer of shares shall be kept as it is only the word transfer to active members shall be interchanged with Producer.