What is producing company?
A Producer Company is an official organization formed by farmers or other agriculturists, also known as a Farmer Producer Company. Its objective is to improve members’ living standards and ensure the long-term stability of their revenue and profitability. It operates according to democratic principles, ensuring equal input in decision-making from all members.
Legal Structure of Farmer Producer Company
- Governed by Section 465 of the Companies Act, 2013, read with Part IX A of the Companies Act, 1956.
- The objectives of a Producer Company must correspond with the activities defined in Section 581B of the Companies Act, 1956.
Purpose of a Producer Company
The purpose of a Producer Company is to advance the welfare of its members by supporting manufacturing, promotion, sale, and export of their agricultural or related products.
Advantages
- No Government or Private Stake: Producer companies cannot have external government or private equity stakes, ensuring autonomy.
- Minimum Capital Requirement: Requires a minimum paid-up capital of ₹1 Lakh and authorized capital of ₹5 Lakhs.
- Flexible Membership: Minimum 10 members; no upper limit on membership.
- Mixed Model: Combines features of private companies and cooperative societies.
- Owned by Primary Producers: Members are those engaged in primary production or allied activities.
- Limited Liability: Members’ financial liability is limited to their shares.
Registration Process for a Producer Company
- Step 1: Obtain a Digital Signature Certificate (DSC) for all directors.
- Step 2: Apply for Director Identification Number (DIN) for each director.
- Step 3: Reserve the company name with “Producer Company” using SPICe+ form.
- Step 4: Prepare necessary incorporation documents (MOA, AOA, proof of address, affidavits, and NOC if applicable).
- Step 5: Submit incorporation application via SPICe+ with ROC.
- Step 6: ROC verifies documents and issues Certificate of Incorporation, allowing business commencement.
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FAQ’s for Producer Company Registration
Define Producer Company?
A Producer Company is a group of farmers or agriculturists working together to improve their income, receive financial support, and increase productivity through cooperative business practices.
