Incorporation of Producer Company: Process, Benefits and More

Producer Company generally aggregate the features of a cooperative society and a Private limited company, Producer Company is an official organization or a group of farmers/agriculture to enhance their quality of life, income and financial support. This kind of company is a combination of both private limited companies and cooperatives. The primary goal of the producer company is to encourage cooperative businesses to form as companies. If you are one of them who wish to start their producer company, then the easiest way to start with CRSPL. 

We will simplify whole process and other tasks to incorporate Producer Company successfully. In order to get more details, read the blog and find producer company incorporation process, documents, and more. So let’s get started without wasting much time.

Benefits of Producer Company

There are several benefits of producer company, they are as follows-

• Limited Liability protection granted to the members of the company.
• Separate legal entity from their members.
• Numerous tax benefits and exemptions under Income tax.
• Government established separate NABARD Bank to avail benefits of Loans and advances.
• Various financial supports by government and their departments.
• Access to better facilities and opportunities to farmers.

Activities of Farmer Producer Company 

1. Agriculture Advancement: - One of the major activities of producer company is to support and initiate agricultural activities such as production, harvesting, procurement, grading, pooling, and handling, it also includes exporting of primary goods and importing of goods and services for the purpose to benefit members.

2. Processing and Preservation: - Producer company also engages in processing activities such as preservation, drying, distilling, brewing, venting, canning and packaging for the members’ produce to enhance marketability. 

3. Equipment and Consumables Supply: - Other activities of producer company includes manufacturing, marketing, supplying machinery, equipment, and consumables for catering to the needs of members.

4. Educational Initiatives: - Conducting educational seminars and events on the basis of mutual assistance so that member can obtain more knowledge to make broad community and grow members’ growth.

5. Providing technical and consultancy services: - Producer company also offers, technical assistance, consultancy, training, research and development and such services with the objective of promoting interest of its members.

6. Member Welfare: - Implementation of other welfare activities for the betterment of its members, decided by board members.

7. Financial Support: The producer company provides financial support to its members in terms of procurement, processing, marketing and other specific activities.

Membership Structure of Producer Company

The membership structure of producer company as follows: -

• Membership is obtained through the purchase of shares in the company
• The actions of the producer company are executed solely by its members 
• Members of producer company play vital role and also holds the authority for dissolution of the company.
• Discussion within the company is done through general meetings, which are convened by its members.

Governance Structure of Producer Company

• Management of producer company is handled by board of directors.
• During the general meeting members of the company elect board.
• The number of board of directors in producer company minimum 05.
• The number of members in producer company minimum 10 or at least 2 Producer institutions as a member.
• The service period of board of directors is 5 years.
• Directors can be re-elected up to 2 consecutive terms.

Share Capital Requirements

• 5 lakh is the minimum authorized capital for producer company.
• Authorized capital can exceed from 5 lakh as specified in the Memorandum of Association.
• The authorized share capital must be sufficient to meet the objectives on producer company that are outlined in the memorandum.
• Authorized share capital must be realistic.
• Minimum paid-up capital for a producer company is 1 lakh.

Producer Company Registration Process

In order to incorporate the producer company, these steps have to be followed 

There is a specified structure of registration of producer company, that need to be followed step by step, here are the required steps for the registration: -

1. Obtain DSC (Digital signature certificate):- For all the proposed directors, DSC is mandatory, they are initially required to obtain this as it is essential of the procedure. It is an electronic signature that is used for e-forms online securely.

2. Obtain Director Identification Number: - After obtaining DSC, next step to move forward DIN (Director identification number) for each proposed director, it is a unique identification number, issued for a director and it is important for directors to appointed in any company. By filing DIR-3 form, you can obtain it.

3. Name Reservation: - The name of the producer company must be unique and end with “producer company”, for that form SPICe+ has to be filed with the ROC (Registrar of Companies) along with the proposed 2 names. Also, preference and significance behind the names is represented, then ROC will review the names and approve one of them on the basis of availability and compliances with naming standards.

4. Preparation of Essential Documents: - You have to prepare some of the important documents for submission, documents are as follows: -

• Memorandum of Association (MOA)
• Articles of Association (AOA)
• Affidavit
• Executed Power of Attorney
• Registered office Proof

5. Filing E-Application: - The forms like SPICe+, e-MOA, e-AOA, Agile-Pro, INC-9 is to be filed on the MCA portal for the application of Producer company incorporation. 

6. ROC Verification and Incorporation Certificate: - The Registrar of companies will review the application, verify the details and provided documents, that should be according to legal requirements. On the basis of satisfaction through the process, ROC will issue the certificate of incorporation for the proposed company that indicates that company has been legally constituted and may initiate the business operations.

Post-Incorporate Steps: - After incorporation, you may have to go through some additional steps such as applying for a PAN, TAN and opening a bank account with the name of the producer company. 

Documents required for the registration of Producer Company

• Aadhar card, PAN Card and passport size photos of all the directors and subscribers.

• Address proof of all the directors and subscribers.
• Address proof of the company registered office like any utility bill not older than 2 months.
• Proof of the producer activities.
• Rent agreement and NOC from the owner of the property if rented.
• Specimen Signature of Directors.
• Signed Subscriber Sheet.
• DIR-2 as a consent from all the directors.
• Executed Power of Attorney
• Optional attachments if any.