A Producer is any person engaged in any close-knit or related activity to the primary producers. A Producer Company is thus an umbrella term that includes all of the following.
Producing, harvesting, procurement, grading, pooling, handling, marketing, selling, exporting the primary producers of the members, or the imports of goods or services.
The producer company primarily deals with the production of its active members. It is allowed to carry on any of the following activities by itself or through other entities on behalf of the members.
The registration process for Producer Company and Private Limited Company is very similar.
An application for name reservation can be filed with the Registrar of Companies (ROC) after obtaining the DSC and DIN.
The name should end with 'Producer Limited Company'.
After receiving the ROC's name approval, file the incorporation application in the prescribed format for incorporating the Producer company.
The Certificate of Incorporation is issued if the registrar is satisfied with the application for the Incorporation of the Producer company.
The functioning of the producer company is similar to the Private Limited company. But unlike the Private Limited companies, there is no limit on the number of members.
Even if the Producer Company's name ends with the words "Producer Limited Company", it shall under no circumstance become or be deemed a public limited company.
Production, Procurement manufacture of its members and others' primary producer is the producer companies' primary function.
A business involved in the marketing or promoting the primary produce or provision of education services to members and others can also constitute itself as a Producer company.
Any business that offers technical assistance to the producers, Provides training and educational services, or conducting research and development can register as a Producer in India.
A business financing producing activities then be it production, or marketing r development it can register itself as a producer company.
The business involved in providing infrastructure to the producers, whether in the form of electricity, water resources, irrigation techniques, or consultation regarding the same, may also constitute themself as a Producer company.
The members of a producer company have unlimited liability as the company is an entity in itself. The amount invested in the business would be lost, and the directors' property would be safe.
Rather than a single farmer managing their entire business, producer companies' work is divided among the directors. The entity is governed by the Management Board, which has a tenure of five years.
A producer company has a separate legal existence, which means that it is not affected by any of its members' death.
Producer Companies were introduced to allow farmers cooperatives to function as a corporate entity under the MCA. Here we are going to talk about the loan provided by NABARD for a producer company in India.
NABARD set up an Rs. 50 crore Producer Organization Development for supporting producer organizations and adopting a flexible approach to meet the producers' needs.
This scheme grants financial support in the form of loans or grants provided for any registered Producer Company. MACS, Industrial Cooperative Societies, and other registered federations set up by the producers.
This PODF Producer Organization Development Fund will support the producers' organization or producer companies by providing credit support, improving capacity, and building market linkage.
In this scheme, activities fall within the agriculture, allied, and non-farm sectors. Various activities like harvesting, storage, processing, packaging, and or marketing of the produce/ product are eligible for support under the PDOF fund.
The Producer Company should be formed by the primary producers of agriculture and the non-farm sector. The producer organization or company must only for the benefit of the producers.
Further, the producer company's shares cannot be sold to non-producers and if an existing member wants to leave the producer company.
Shares can only be purchased either by existing producers or by enrolling a new primary producer.
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Opening a current account for a producer company is easier when compared to opening of current account for a sole proprietorship firm as a company is a registered legal entity – recognized by law. Therefore, once a company is incorporated, a bank account can be opened in the name of a company with the incorporation certificate of the company and identity/address proof of the Directors.
A minimum of five people are required to register a producer company in India.
Identity proof and address proof is mandatory for all the proposed Directors of the Producer Company. PAN Card is mandatory for Indian Nationals. In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.
IndiaFilings.com can incorporate a Producer Company for in 20-30 days. The time taken for registration will depend on submission of relevant documents by the client and speed of Government Approvals. To ensure speedy registration, please choose a unique name for your Company and ensure you have all the required documents prior to starting the registration process.
Once a Company is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and maybe struck off from the register after a period of time. A struck-off Company can be revived for a period of upto 20 years.
A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature. Hence, a Digital Signature is required for all Directors of a proposed Producer Company.
Director Identification Number is a unique identification number assigned to all existing and proposed Directors of a Company. It is mandatory for all present or proposed Directors to have a Director Identification Number. Director Identification Number never expires and a person can have only one Director Identification Number.
The Director needs to be over 18 years of age and must be a natural person. The Director must be involved in farming activities.
An address in India where the registered office of the Company will be situated is required. The premises can be a commercial / agricultural / residential where communication from the MCA will be received.
IndiaFilings.com is committed to helping entrepreneurs and small business owners start, manage and grow their business with peace of mind at an affordable price. We aim to educate the entrepreneur on the legal and regulatory requirements and be a partner throughout the entire business life cycle, offering support to the company at every stage to make sure they are compliant and continually growing.
Last updated: Apr 27, 2021