What Is a Producer Company and How to Register One?December 27, 2021
Agriculture has been the primary occupation in India for generations. Even today, the Indian economy relies heavily on agricultural activities. Sure, India is on a path of development, and the government is encouraging the growth of various industries and businesses through numerous schemes and incentives. However, other sectors still find it difficult to source raw materials in certain parts of the country.
On the other hand, agricultural activities are abundant in almost every part of India. So, based upon the type of company, an individual can set up producer companies in various locations. Similarly, the raw materials required for a producer company can be sourced easily. So, what is a producer company, and how can you register for one?
Producer Company Incorporation and Objectives
After becoming a producer company, farmers’ cooperative societies can function as a corporate entity under the Ministry of Corporate Act. Any agricultural activity carried on by a farmers’ corporation can be included for registering a producer company. The objectives of a producer company could be related to the production of food grains, harvesting, procurement, and grading.
Equivalently, when an organisation collectively decides to handle, market, sell, import, or export its primary produce, it can form a producer company. The members of the producer company can manage any process of production or processing, including drying, vinting, canning, and packaging. A producer company shall sell or purchase equipment and machinery collectively.
With techniques of mutual assistance, a producer company can involve themselves in learning new methods or set principles with their members. Furthermore, one single producer company can purchase insurance to safeguard the produce of all its members or share power supply, water, and revitalisation of land. A producer company can even share or apply for financial assistance and credit facilities on behalf of its members.
Registration and Formation of Producer Companies
There are certain criteria set by the government for registering a producer company. Though it is very similar to registering a private limited company, some differences exist. A producer company is usually formed by ten or more individuals, each being producers, or by ten or more producer institutions. Also, a producer company can be formed by a combination of ten or more individuals and producer institutions.
A digital signature certificate or DSC, along with every director’s identification number (DIN), is required to form a producer company. Similarly, a self-attested copy of each member’s Aadhar Cards, PAN Cards, and contact details must be attached while registering a producer company.
The next step involves filing the proposed company’s name in Form-1A with the RoC of the respective state. A nominal amount will be collected by the RoC in fees, and the name will be issued to the company if it is available. Once the name is registered, you will need to draft the necessary documents, including an MoA that states the company’s objectives and the amount of share capital to be registered.
In the final stage of registration, the members of the producer company shall be required to file Form-1, which declares all incidental matters of the company. Form-1 should accompany an affidavit signed by the members of the producer company. The director(s)’ consent letter, utility bills, and NOC will also be required.
The objectives of a producer company must be mentioned during registration as per the Act laid by the government. Once the registration process is completed, the ministry will grant the certificate of incorporation within a month of receiving all the necessary documents. Once the certificate is received, the company shall become a corporate entity as it is a private limited company. A producer company cannot be converted into a public limited company under any circumstances.