Producer Company Registration in India

INTRODUCTION

Producer Company is another legitimate substance that incorporates specific classes like. Agricultural produce (farmers) which may further include organic farming, Poultry business, forest produce, artisan products, or where the members are Primary producers. Producer Company can do any one or more activities as are given under section

581B of the companies act. It has been conceptualized, taking into the

Considerations of agriculturists {our farmers} (termed as ‘Producers’) who is Producer? The producer is someone who is any person involved in any activity which is associated with or engaging in any essential produce. For example farmers or other primary producers.

AMENDMENT TO COMPANIES ACT 1956

Part nine A was included in the Companies Act, 1956 by amending the

Organizations Act, 1956, in 2002 which comprises of Chapters I to XII, covering Sections 581A to 581 ZT, these special 46 provisions are still in existence and Deals with the producer companies. The main thing we really want to note down is these special 46 provisions shall prevail over the other provisions of the Companies act in case any contradiction arise with the other general provisions of the same act.

A producer company carries on various activities which are referenced in segment 581B of Companies Act 1956

Like –

1. Procurement
2. Harvesting
3. Production
4. It might incorporate the power age, banking movement.
5. Drying, brewing, etc.
6. Fertilizer manufacturing, supply of machinery, equipment, or consumables mainly to its members.
7. rendering various technical services, consulting services, training, research furthermore improvement, different exercises for the advancement of the interest of its individuals,
8. Conservation and communications relatable to primary producers, transmission, generation, and distribution of power, revitalization of land and water resources, their uses,
9. Insurance of producers or their primary produce, etc.

Producer Company- Private Company or Public Company?

Name of every producer company contains suffix ‘‘Producer Company limited’’ it may cause confusion in the mind that whether it is a public company? It is a private company only.

As per clause five of the section 581C of Companies Act, 1956, on

Enrolment the Producer Company will turn into a body corporate as though it is a Private Company and shall not under any circumstances be considered a Public Company.

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FEATURES OF PRODUCTION COMPANY

• Number of members- 10 or more individuals, each of them should be a Producer, or
• Combination of 10 or more producer corporations or individuals or 2 or more producer institutions are involved.
• Number of Directors in Producer Company — at least 5 directors but No more than 15 directors are allowed.
• Minimum Paid-up capital of Rs. 5 lakh required.
• Voting rights in this type of company realigned with the principle of { one man-one vote }regardless of shareholding in the maker Companies of their members.

OBJECTIVE OF THE PRODUCER COMPANY,

It is not just earning profits but to helping every member of such

Institutions and sharing profits between members. There are various challenges faced by producers like climate issues, technological advancements, labour issues, policy changes, etc. These challenges were considered by the policymakers and implemented through the various schemes which led to some kind of formalization into the agricultural sector.

Formation of a producer company –

Any two or more producer organizations or any ten or more persons in which each one is a producer or there may be a combination of both i.e., ten or more persons and producer organizations having its objectives specified in section 581B and also complying with various requirements of this part may incorporate a company as a producer company.

• Incorporation of the producer company depends on the satisfaction of the registrar. If he is satisfied that all the requirements of the act have been complied then he shall, within 30 days of the document submission register the reminder and issue a declaration of the organization.
• Producer Organizations have the option to reimburse their promoters for all other costs which are associated with the promotion and registration of the company including registration fees, legal fees, the printing of a memorandum and articles and other payments.
• On registration under sub-section one, the Producer Company shall become a body corporate like it is a private confined association to which the courses of action contained in this Part apply.

Registration of Producer Company

Necessary documents

Step 1: Apply Digital Signature Certificate (DSC) and Director’s Recognizable proof Number (DIN) from every one of the Directors with self-confirmed duplicates of Documents like PAN, Aadhaar card, and contact details. The Director’s Aadhaar Card Photograph, Email Id, Contact Number.

Step 2: We have to fill the Proposed company name in FORM-1A with the Registrar of the company (roc) of the respective state along with the mentioned Expense. Once the name is available, the ROC informs about the availability of the name.

Step 3: Then we have to Draft the necessary documents like Memorandum of Association to incorporate the objects of the company and The amount of share capital to be registered, Article of association in which (Internal rules and regulations of the company is to be written)

Step 4: This step requires Filing of other important documents like

Legal statement in the Form-1 pronouncing consistency of all and coincidental

Matters with respect to the development of organizations; affirmation endorsed by the Subscribers of the proposed company.

Step 5: Then the final Certificate will be issued after which the

The organization will turn into a corporate body as though it is a private restricted organization.

It can’t turn into a public restricted organization.

Benefits of producer companies-

• Financial assistance- Loans and advances-Government helps these
• Companies with necessary finances. The government has also setup
• NABARD for this purpose. A producer organization development fund of
• Rs.50 crores have been set up by NABARD to fulfill the financial needs of the
• Producers. This type of credit facility is very helpful for these companies.
• Every member of such type of company. Will receive a value for the product. In
• Which they deal.
• Member of such type of co. can get bonus shares in the proportion to the amount held.
• Tax benefits-100% deduction is applicable to the companies with an annual turnover of Rs 100 crore and companies earning profit are not taxed
• Good governance.
• Easy management

Conclusion-

This concept of forming a producer company is intended to benefit farmers and various other groups. It requires handholding support from the government in the initial stages. Once it grows it cumulatively helps various sections of the society.