Producer Company Registration - Procedure, Fees, Documents Required
Updated on April 15, 2021 12:54:45 PM
The Indian economy is an agricultural centric economy. Agriculture in India is livelihood for a majority of the population as it employs more than 50% of the Indian workforce. But the sad part is producers and farmers are deprived in the agricultural process. They don’t have access to technology, knowledge and funds. To address this issue, the concept of Producer Company was introduced in 2002, to help improve the lives of farmers and producers.
Producer company is a corporate body of producers, farmers and agriculturists with the objective of procurement, production, harvesting, grading, pooling, handling, marketing, selling or export of the members or import of goods and services for themselves.
In simple words, this type of company is formed with the aim to improve the lives of people associated with the agriculture industry by providing them access to technology, market, credit, etc.
It is registered as a public company under the Companies Act, 2013 and must include “Producer Company Limited'' as the last words of its name.
The objects of Producer Company given under Section 581B (as per the law) are as follows:
“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 including preserving, drying, distilling, brewing, vinting, canning and packaging of 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, revitalisation 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 assistanc;
Welfare measures or facilities for the benefit of Members as 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 of credit facilities or any other financial services to its Members."
Benefits of Producer Company registration
Separate Legal Entity: Producer Company is a separate legal entity which means it can acquire assets and incur debts on its own name. The directors have no obligation to the lenders of the company.
Loans and Investments: As the producer company is formed by individuals or institutions who are primary producers, the government has passed a special provision for giving loans to the producer members. For this specific purpose, NABARD Bank was established to provide financial assistance to producers and farmers via NABARD Loan.
Tax Benefits: There are certain tax benefits and exemptions for a producer company depending upon the agricultural activity it carries on.
Limited Liability: As per the Companies Act, 2013, directors and shareholders have limited liability protection. So if there are any financial issues with the company, the assets of the director are secured and could not be seized by banks or departments.
Acceptance of deposits: A registered producer company can accept deposits in the form of fixed or recurring deposits and the company can advance loan to the members and farmers at lower rate of interest.
Minimum requirements for Producer Company registration
Minimum 10 producers or individuals are required to form a production company but there is no upper limit
Or, at least two producer institutions are required to form a producer company
Out of 10 members, 5 directors are required to incorporate producer company
Minimum capital of 5 lakh rupees for producer company registration
Producer company cannot be converted into a public company
Process of Producer Company registration
Step 1. Application for Digital Signature Certificate (DSC)
Producer Company registration is a complete digital process and therefore requirement of Digital Signature Certificate is a mandatory criteria. Directors as well as subscribers to the memorandum of the company need to apply for a DSC from the certified agencies. Obtaining a DSC is a complete online process and it can be done within 24 hours. This process involves 3 simple verifications that are document verification, video verification and phone verification.
Step 2. Application for the Name Approval
Name application for Producer Company can be done through SPICe RUN form which is a part of SPICe+ form. While making the name application of the company, industrial activity code as well as object clause of the company has to be defined.
Note:It should be ensured that business name does not resemble the name of any other already registered company and also does not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950). You can easily check the name availability by using our company name search tool to verify the same.
Step 3. Filing of SPICe Form (INC-32)
Post name approval, details with respect to registration of the company has to be drafted in the SPICe+ form. It is a simplified proforma for incorporating a company electronically. The details in the form are as follows:
Step 4. Filing of e-MoA (INC-33) and e-AoA (INC-34)
SPICe e-MoA and e-AoA are the linked forms which have to be drafted at the time of application for company registration. Memorandum of Association (MOA) is defined under section 2(56) of the Companies Act 2013. It is the foundation on which the company is built. It defines the constitution, powers and objects of the company. The Articles of Association (AOA) is defined under section 2(5) of the Companies Act. It details all the rules and regulations relating to the management of the company.
Step 5. Issuance of PAN, TAN and Incorporation Certificate
Post approval of the above mentioned documents from the Ministry of Corporate Affairs; PAN, TAN & Certificate of Incorporation will be issued from the concerned department. Now, the company is required to open a current bank account by using these documents. You can contact us for assistance with your current bank account opening.
Register your Producer Company Online with Professional Utilities
The process of registering a Producer Company is complicated and involves various compliances. Our experts at Professional Utilities can simplify the whole registration process for you. Register your Producer Company Online in 3 easy steps:
Step 2: Provide all the required documents for registration of the company and make 50% payment in advance.
Step 3: Your incorporation certificate and other included documents will be delivered to you.
Documents required for Producer Company registration
Passport size photographs of the members
Copy of PAN Card of the members
Copy of Aadhar Card or Voter ID
Bank statement (not older than two months)
Proof of registered place of business like utility bill
No Objection Certificate from the owner of the property
Documents you’ll get after registration of Producer Company
Post incorporation of Producer Company, you’ll receive the following documents:
Certificate of Incorporation
Permanent Account Number (PAN) of the company
Tax Deduction or Collection Account Number (TAN) of the company
Articles of Association (AoA)
Memorandum of Association (MoA)
Direction Identification Number (DIN)
Digital Signature Certificate (DSC)
EPF and ESIC registration documents
Company Master data
Producer Company registration fees
The fees for registration of Producer company depends upon the no. of members, directors and authorized share capital. The total cost of Producer Company registration is ₹12,999 including government & professional fees for five directors and authorized share capital of 5 lakh rupees.
Time required for registration of Producer Company
On average, it takes around 15-20 working days to register a Producer company in India subject to document verification by the Ministry of Corporate Affairs (MCA).
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Frequently Asked Questions (FAQs)
How do you start a producer company?
At least 10 or more members, or minimum two producer institutions are required and minimum 5 lakh rupees as share capital for incorporation of the producer company. There must be a minimum of 5 directors and proper identity & address proof is required to submit alongwith professional certification (CA, CS, etc.).
Who can form a producer company?
A minimum of 10 members or two producer institutions are required to form a producer company.
What is Producer Company as per Companies Act 2013?
A producer company is a public limited company having objectives specified in section 581B.
What is the minimum paid up capital at the time of registration of a company?
Minimum capital of 5 lakh rupees is required at the time of registration of a company.