PRODUCER COMPANY IN INDIA 2022
DEFINITION
A Producer Company registration in 2022 was introduced in India with the Companies Act, 2013. This gives individuals engaged in activities related to products that have been produced or grown specially by farming activities the opportunity to form a company. A producer company can be incorporated by 10 or more producers or two or more producer institutions or a combination of 10 or more producers and producer institutions. A producer company can only have equity capital, it needs a minimum of five directors and an authorized capital amount of INR 5 lakh.
The process for the incorporation of a producer company is similar to the formation of a private limited company.
DIFFERENT TYPES OF PRODUCER COMPANIES IN INDIA
- The main activities of a producer company are production/procurement or manufacturing any primary produce for its members, who can then sell that same produce to others.
- A marketing business that is engaged in the marketing/promotion of primary produce/provision of educational services to members and others can incorporate itself as a producer company
- A technical service business that offers technical assistance to producers/provides training and educational services/ conducts research and development can also register itself as a producer company
- A financing business that is engaged in financing producer activities such as production/marketing/development domain, can also register as a producer company.
- An infrastructure business that is engaged in in providing infrastructure to producers in the form of electricity/water resources/irrigation techniques/and utilization, or any form of consultation services in regard to the same, can also incorporate itself as a producer company
DOCUMENTS REQUIRED TO BE SUBMITTED BY THE DIRECTORS & SHAREHOLDERS
- A scanned copy of PAN Card or passport for foreign Nationals & NRIs
- A scanned copy of voter’s ID or passport or driver’s License
- The scanned copy of the latest bank statement, telephone or mobile Bill and electricity or gas Bill
- A passport-size photograph of the directors
- A specimen signature of the directors which is essentially a blank document with signature
Note: Any one of the directors in the producer company must self-attest the first three documents. In the case of foreign nationals and NRIs, all the documents have to be notarized if currently in India or a non-Commonwealth country/or apostilled if in a Commonwealth country.
DOCUMENTS NEEDED FOR THE PRODUCER COMPANY REGISTERED OFFICE
- A scanned copy of the latest bank statement, telephone or mobile Bill and electricity or gas Bill
- A scanned copy of the notarized rent agreement in English
- A scanned copy of the No-objection Certificate (NOC) from the property owner
- A scanned copy of the Sale Deed/Property Deed in English (in the case of owned property)
Note: The registered office need not be a commercial space; it can be a residential property as well.
BENEFITS OF A PRODUCER COMPANY
1) LIABILITIES ARE LIMITED
Any and all businesses run the risk of not being able to repay their liabilities. In such a situation, a sole proprietor or individual producer would become personally liable for all the liabilities of the business. However, the members of a producer company have unlimited liability as the producer company is an entity in itself. Thus, only the amount invested in the business can be lost, the personal property of the directors is always safe from any debts or liabilities.
2) THE ECONOMIES OF SCALE
Only 15% of India’s farmers own over two acres of land. The majority of farmers cannot safely unlock the benefits that are possible with economies of scale. With the creation of a producer company, multiple farmers can work together as a collective which helps to lower costs/reduce risk/and helps them get access to better credit facilities. This helps these farmers to plan better and gives them more bargaining power with the buyers.
3) BETTER MANAGEMENT PRACTICES
When a farmer works within a producer company, his entire work operation is now divided between the directors of this company. A producer company is managed by the Board of Management which has a tenure of five years. Also, since a producer company has a separate legal existence its existence isn’t affected by the death of any of its members.
Our team of tax and legal experts at ACE ALLIANCE will help you with your company’s name reservation. Our team will ensure the chosen name must have the words ‘PRODUCER COMPANY’ at the end of its name. Our team will help you get 5 DSC and 1 DIN for your company. Our team will also assist you in drafting and filing all the documents such as MOSA, AOA, PAN and TAN that are required for your producer company registration. Post this our team will assist you with any post registration formalities and compliances that may crop up.