Producer Company Registration

A Producer company is a type of co-operative organization under the Companies Act, 2013, whose purpose is to provide services to farmers, artisans, artisans, and people engaged in the production of goods and services. In lets individuals from similar sector to pool resources, work together, and increase their collective productivity. Unlike distinctive companies, a producer company focuses on maximizing the interests of the manufacturers.

A Producer company's main objective is to carry out commercial activities related to agriculture, farming and manufacturing, with emphasis on promoting the economic welfare of its members. This type of registration supports the welfare and economic development of the people involved in agriculture, livestock and associated sectors.

The structure of a Producer company is parallel to that of a private company but with further provisions to guarantee mutual profit to the associates. It also includes the distribution of profits on the basis of contribution rather than ordinary shares, where the interests of producers are paramount. Along with proper registration, the Producer Company gets various government schemes, financial assistance and security against market fluctuations.

What is meant by Producer Company Registration?

A producer company is defined under the Companies Act of 2013 as a form of Company that is launched by a group of individuals primarily engaged in production, procurement, handling, pooling and marketing agricultural products. Here, the primary produce includes farmers' products, ranging from horticulture to animal husbandry, along with any other produce defined under the Central government.

The producer company is formed by ten individuals and two institutions with five directors, constituting a legal entity. For instance, the members of the producer company seem to have limited liability and control over the assets.

Besides, the company act of 2013 brings forth the registration, management & incorporation, which completes the process of Company registration.

Under Company Law 1956 Objects of the Producer Company

The objects of the Producer Company shall relate to all or any of the following matters, namely:

• Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit: Provided that the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution.
• Processing includes preserving, drying, distilling, brewing, vinting, canning and packaging of the produce of its Members.
• Manufacture, sale or supply of machinery, equipment or consumables mainly to its Members.
• Providing education on the mutual assistance principles to its Members and others.
• Rendering technical services, consultancy services, training, research and development, and all other activities for the promotion of the interests of its Members.
• Generation, transmission and distribution of power, revitalization of land and water resources, their use, conservation and communications relatable to primary produce.
• Insurance of producers or their primary produce.
• Promoting techniques of mutuality and mutual assistance.
• Welfare measures or facilities for the benefit of Members may be decided by the Board.
• Any other activity, ancillary or incidental to any of the activities referred to in clauses (a) to (i) or other activities which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner 
• Financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) which include extending credit facilities or any other financial services to its Members.
• Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section.

If you are a group of farmers, artisans, or entrepreneurs engaged in producing and marketing goods, registering as a producer company can offer several advantages. Here are some of the benefits of producer company registration:

• Limited liability

One of the primary benefits of the Producer company registration is Limited Liability protection granted to its members. Within this, the limited assets of the people are not put at risk, even if any legal or financial capabilities might arise. Such a thing extinguishes financial pressures and allows for the smooth functioning of business operations.

• Separate legal Entity

The second advantage of Farmer Producer Company is a separate legal entity from their members, which specifies how it might own the property or enter into contracts. This can help you secure enough credibility and trust among suppliers, investors and customers.

• Tax Benefits

The farmer-producer companies are blessed with numerous tax benefits, such as exemption from income Tax, especially on their profits during the first five years of operation, with deduction of expenses & lower taxes generated per the Company's rules. Such a thing acts as a blessing & saves you money while letting you contribute to the business's growth.

• Access to Capital

It is viewed that Producer companies mainly raise capital from their investors by issuing shares or debentures. Such a provision provides sufficient funds for enlarging your business, introducing investments or stepping into new markets. In addition, producer companies might also seek financial assistance from banks or other institutions.

Therefore, such are the benefits of the farmer Producer Company Registration power-packed with prospects for growth, reinvestment and newer business opportunities.

Before registering a Producer Company, ensure you meet these basic requirements:

• Minimum Members: Minimum 10 persons or 2 legal entities are required to register a Producer company. These members should be involved in the manufacturing of goods and services related to agriculture or manufacturing sector.
• Director Criteria: At least 3 directors are mandatory to form a producer company and they should be members of the company. Directors can be selected among the producers.
• Object Clause: A Producer company's primary objective is to focus on agricultural production based activities to improve the livelihood of farmers.
• Registered Office: A registered office address in India is an obligatory prerequisite. Official communications should be made accessible throughout the company.
• Shareholding Limit: In a Producer company, the shareholding is limited to the producers themselves and the members' contribution is established on the share of production, rather than the capital investment.
• Profit Distribution: The profits of the company will be distributed among the members on the basis of contribution to production rather than shareholders, which will ensure a fair system of benefits.
• Compliance with Companies Act: In order to maintain transparency and legitimacy, the manufacturing company must comply with the Companies Act, 2013, which includes mandatory statutory audit, annual filing and other compliance requirements.

Firstly, members and directors are required to obtain DSC for this:

• PAN
• Photograph
• Aadhar or bank statement
• Email id
• Mobile number

For Incorporation Process:

• ID proof of proposed Directors and Subscribers (any one of them)
• Passport | Driving license | Voters ID card
• Address proof of proposed Directors and Subscribers (any one of them)
• Electricity bill of residing address | Mobile bill | Telephone bill | Bank statement
• Address proof for proposed company
• Proof of Office address (Conveyance/ Lease deed/Rent Agreement etc. along with rent receipts) | Copy of Utility bill (electricity bill, gas bill, Mobile bill etc) (not older than 2 month)

This comprehensive guide will walk you through the smooth and hassle-free process of registering your producer company. Whether you are a farmer, a group of farmers, or an agricultural organisation, this step-by-step guide will provide you with all the necessary information and insights to navigate the complexities of producer company registration.             

Producer company registration process involves various steps, which are- 

Step 1:- Choose a type of the Company

Being a farmer-producer company, the first step is choosing the type of Company you wish to form, such as a small or regular producer company. As per the former, the name seems explanatory concerning the number of individuals forming a part of this union. It is formed by a minimum of ten individuals, followed by a paid capital of up to 50 lakhs. In contrast, these conventions do not so restrict the latter. 

Step 2:- Choose a name of the Company

A farmer-producer company should have a different and unique name for the organisation. You can look at the same & check for its availability on the MCA portal.

Step 3:- Obtain Digital Signature Certificate (DSC)

The third step is to acquire Digital Signature Certificate for the shareholders & directors of the Company. It is usually required for signing electronic documents during the registration process.

Step 4:- Obtain Direct Identification Number (DIN)

Here, you must obtain the Direct Identification number from the Company's directors. For instance, DIN is allocated by MCA.

Step 5:- Draft MoA & AoA

The next step is to Draft the Memorandum of Association & Articles of Association. In addition, it is called a legal document, which specifies the rules & regulations of a company.

Step 6:- Request for Incorporation documents

You require incorporation documents from the Registrar of Companies (ROC) for your farmer-producer Company.

Step 7:- Obtaining Certificate of Incorporation

Once the Registrar of the company shares approval for your certificate, your Producer Company Registration will be completed with a certificate of incorporation being issued. No wonder it is one of the essential documents signifying the existence of the Company.

In conclusion, the above step-by-step process will help you register your producer company smoothly. It is essential to follow all the steps carefully to avoid any legal issues in the future. So, start your producer company registration process today and become a successful entrepreneur.

At Corpseed, we understand the importance of having a Producer Company Registration. It is a crucial step towards expanding your business and reaching new heights of success. Our team of experts has years of experience and extensive knowledge of the procedures involved in obtaining a producer company registration. We are well-versed in the legalities and regulations of the process, ensuring that your registration is completed seamlessly and efficiently. With our expertise, you can rest assured that your registration process will be handled with the utmost care and professionalism. So, if you are looking for a reliable and experienced team to handle your subsidiary company registration, look no further than Corpseed.