Producer Companies: Complete Procedure For Incorporation

CS Rashi Jain | Last updated: 29 May 2021

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Quick Summary

A Producer Company is a corporate body that combines elements of private limited companies and cooperative societies, designed to support farmers and agricultural producers. It allows ten or more individuals or two or more institutions to collectively engage in activities like procurement, production, processing, marketing, and exporting of agricultural produce. Forming a producer company offers benefits such as reduced costs for inputs, improved price negotiation power, and access to government subsidies.

Let us understand the concept of Producer Companies before its Incorporation Procedure. What is a producer company, what are its benefits, how it works etc..

"A single farmer who can't, a group of farmers can achieve that"

A producer company means a body corporate having objects or activities specified in section 581B and registered as producer company under the Companies Act, 1956. A producer company is a blend of a Private Ltd Company and a Cooperative Society. It works on the unique elements of a cooperative business and the regulatory framework of private limited companies. It can be formed by 10 or more individuals or 2 or more institutions or by a combination of both having their business objectives as follows: Procurement, Production, Processing, Harvesting, Grading, Pooling, Handling, Marketing, Selling or Exporting etc. The benefits of forming a producer company are: Purchase Cost Reduction for fertilizers, seeds etc, Large production as per demand forecast done through market survey, Price Negotiation benefit while selling the produce, early price fixation, can operate storage facilities which is not possible for individual farmer, food processing like jelly from fruits, Govt. subsidies, equity grants upto Rs. 15 Lakhs.

As per Producer Companies Act, every producer company shall have a full time Chief Executive Officer to be appointed by board a person other than the members who shall be entrusted with substantial powers of the board, to operate the bank accounts, to sign any business related documents on behalf of company, to maintain proper books of accounts, prepare annual accounts, responsible for providing timely information to board and members of the company etc.

Procedure

Minimum 10 members and 5 Directors are required having pan and Aadhaar, voter id/driving license and bank statements with 2 months latest transactions, passport size photograph and separate mail id and mobile numbers.
Reserve a name for Farmer Producer Company with suffix Producer Company Limited through eform Spice+ Part A by giving the main division of industrial activity and summary of objects of the company.
Once the name is approved by ROC then proceed with Spice+ Part B
Get Digital Signatures for minimum 5 members who will be the directors of the Company.
Fill the details of Capital Structure of the Company, number of members of the company, regd address of the Company, email id and mobile number of the company, Subscriber and directors details.
Particulars of first subscribers of the Company.
Particulars of directors already having din, maximum 5 din we can take through spice + form.
Fill the type of ID Proofs and Residence Proof available.
Enter the number of shares subscribed by the first subscribers and any other entity in which director have interest.
Select the mode of payment of stamp duty for MOA & AOA.
Details of PAN/TAN Code refer below link:

https://www.tin-nsdl.com/services/pan/pan-aocode.html
https://www.tin-nsdl.com/services/tan/tan-ao-code.html

Select the Business/Profession Code
Attachments: MOA & AOA as there are 10 subscribers to memorandum and DSC can be affixed for maximum 7 members.
Utility bill for registered office address proof
ID & Residence Proof of Subscribers
Proof of identity and address for Applicant for DIN (PAN is mandatory for DIN)
Rent Agreement and Noc is mandatory if rented premises.
Proceed for Spice+ Agile Pro
Fill the details regarding GST Reg if req , Directors details, Police Station of area.
Proof of ID and address and specimen signature for Authorised Signatory for opening of Bank Account.
Prescrutiny and then submit
INC-9 shall be generated web based.
Download forms in PDF for affixing Digital Signatures and file the forms in linked form and make payment.
Once the form is approved Certificate of Incorporation will be issued with PAN, TAN ,GST Number if applied.
First AGM shall be conducted within 90 days from the date of Incorporation.

FAQ :

A Producer Company is a body corporate registered under the Companies Act, 1956, that blends the features of a Private Ltd Company and a Cooperative Society. It is formed by individuals or institutions with objectives related to procurement, production, processing, marketing, and exporting of agricultural produce.

A Producer Company can be formed by a minimum of 10 individuals, or 2 or more institutions, or a combination of both, who share common business objectives in agriculture.

Benefits include reduced purchase costs for inputs like seeds and fertilisers, better price negotiation for produce, ability to operate storage facilities, access to government subsidies, and equity grants up to Rs. 15 Lakhs.

You need a minimum of 10 members and 5 Directors, along with PAN, Aadhaar, Voter ID/Driving License, bank statements, passport photos, and separate email IDs and mobile numbers.

The CEO, appointed by the board, is responsible for substantial board powers, operating bank accounts, signing documents, maintaining accounts, preparing annual accounts, and providing timely information to the board and members.

Once the forms are approved and the Certificate of Incorporation is issued, the first Annual General Meeting (AGM) must be conducted within 90 days of the incorporation date.