Producer Company mean any person engaged any activity connected with or relatable to any primary produce . The objective behind the incorporation of Producer Company is to production, harvesting, procurement, grading, pooling, handling, marketing, selling, and export of primary produce of the Members or import of goods or services and other related activities for their benefit. Producer Company must deal primarily with produce of active Members and is allowed to carry activities by itself or through other entities- on the behalf of the members of Producer Company can be registered by any of following combination by complying with the prescribed limited formalities of the Companies Act, 2013
*Ten or more individuals, each of them is producer
* Ten or more individuals and producer institution
* A combination of ten or more individuals and producer institution
Nidhi company is considered a good substitute for credit co-operative society and is more convenient to operate with fewer compliances.
Producer Companies are those companies where minimum ten members are required and there is no limit for maximum number of members. A Producer company provides limited liability to its members. Under any circumstance, whatsoever shall not become or be deemed to become a public limited company. A minimum of five Directors are required for establishing a Producer Company.
With agriculture being the mainstay of the Indian economy, this sector employs more than 50% of India’s total workforce and contributes almost 17-18% to the country’s GDP.
Bearing in mind the persistent issues of farmers and agriculturalists (collectively termed “Producers”) in India, like agricultural labour, technological advancements, policy changes, etc., and to bring in better governance and channelize the agricultural activities, the concept of “Producer company” was introduced in 2002.
A producer company can be defined as a legally recognized body of farmers/ agriculturists with the aim to improve the standard of their living, and ensure a good status of their available support, incomes and profitability. Under Companies Act 2013, a Producer Company can be formed by
Producer Company may carry on any of the activities as specified below either by itself or through other institution
This will include preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members;
It will help in manufacturing, sale or supply of machinery, equipment or consumables mainly to its Members;
Producer company helps in providing education on the mutual assistance principles to its Members and others;
Producer company helps in rendering technical services, consultancy services, training, research and development and all other activities for promotion of the interests of its Members;
One of the major activity is generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce
Producer company take care of insurance of producers or their primary produce;
Producer company promotes techniques of mutuality and mutual assistance amongst the Members
The most important objective of Producer Company is financing of procurement, processing, marketing or other activities by extending of credit facilities or any other financial services to its Members.
The main purpose of the Producer Company is to form a farmer society in the form of a company and conversion of an existing co-operative society into an organized company. For this, they perform certain beneficial activities like production, procurement, pooling, harvesting, grading, handling, marketing, selling and import/export of the primary producers of all the members.
Here are some important benefits of registering a Farmer Producer Company in India:
Just like any other type of company, a producer company is a separate legal entity under the Act. Consequently, a producer organization has a wide lawful limit and can claim property and furthermore acquire obligations. The individuals (Directors) of a producer organization have no obligation to the lenders of a producer organization.
Since the Government is completely responsible for keeping the interest of the members, it ultimately helps in success of the Producer Company.
A Producer Company is a great stage for the primary farmers to get better facilities which they are unable to get from the other mediums. Members who work in producer companies can easily access government services like Pension, loan, Scholarship etc.
In the union budget of 2018-2019, it was mentioned that 100% deduction will be allowed to those companies which register themselves as a farmer-producer companies with an annual turnover of Rs. 100 crores and earning profit out of the same. Hence, they need not to pay any tax. Since farmers are the pillars of our economy, government has extended a 100% deduction to farmer Producer Company.
Registration as a producer company is quite an easy process. The company can make changes in the Board of Management through filing some simple forms with the concerned ROC.
The members of the producer companies are initial producers, hence they need finance from time to time. NARBAD bank is inaugurated by the government for the farmers’ producer companies. This bank offers loans to the farmers for a period not extending six months to meets the needs of the procedure companies. In the event, if the members of the procedure company need finance for farming they can effortlessly take from the NARBARD bank for a specific period of time.
A producer company has ‘unending progression’, which means that it has continuous presence until it is legitimately wound up. A producer company is unaffected by the death or other take-offs of any kind.
Every Member shall on the basis of share capital contributed, entitled to receive maximum dividend as may be specified by the articles
Every Producer Company shall have internal audit of its accounts carried out, at such interval and in such manner as may be specified in articles by a chartered accountant.
Two proposed names of Proposed Company.
Authorized & Paid Capital
From All Directors and Shareholders (Minimum 10)
i. Copy of PAN Card
ii. Copy of Identity proof (Aadhaar Card/Passport/Driving License/Voter Card)
iii. Copy of Address Proof (Latest Bank statement/Electricity Bill/Telephone bill/Postpaid Mobile Bill)
iv. Passport-sized photograph of all directors and shareholder
v. Producer certificate of all subscribers/ Directors.
vi. Khasra/Khatauni of all subscribers/Directors
vii. Mail id and Mobile No.
viii. Qualification
ix. Shareholding details
For Registered office proof of the company
a. Utility Bill such as electricity bill/telephone bill/Postpaid Mobile Bill/Gass Bill for proposed Registered office address of company.
b. NOC/Rent Agreement