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Who doesn’t know that India is rich in the Agricultural Sector? The major portion of Indian economy depends largely upon agricultural activities and to support them, farmers were also given corporate entity level recognition by allowing them to register Producer Companies. Agriculture industry in past few decades emerged as a new global phenomenon giving space for more Producer Company Incorporation. However, due to lack of awareness, still some application in agricultural sector is at an age of evolution.
Before Producer Company Registration in India, Primary producers and farmers were struggling a lot to get the production technology and post harvesting material. This was the time when the Government of India recognized the need of farmers and decided to help them in a best possible manner by Producer Company Registration with a panel of experts was formed to address this issue who come up with the idea of Producer Company.
If you wish to register a Producer Company in India, below are the Registration Procedure of Producer Company Incorporation:
Producer Company can be formed by ten or more individuals or two or more institutions or by a combination of both having their business objective as one of the following:
Note: The intent of Producer Company Registration is to empower all the small and medium farmers so that their economies can be unbarred, and they could also opt the latest and new technologies to trail better and improved lives.
Requirements to register a producer company:
Legal Framework: These types of companies are registered and governed by the Companies Act. We, the team of CCL can help you to register your Producer Company.
Separate Legal Identity: Like other form of companies, Producer companies also has its own legal identity in the eyes of law which means it can purchase and sell propety on its own name.
Limited Liability: Another important feature of Producer Company is that the liability of members is limited to amount contributed by them in the form of capital which also mean that their personal assets cannot be used to meet the losses and debts of the company.
Credibility: Since Producer companies are regulated by companies act, credibility and reliability of farmers increases on such types of companies.
Loan requirement: Because of its legal nature, Producer Company can easily get Loan from various institution. Working capital requirements and other credit facilities are generally given to the members of the Producer Company for a period of 6 months or less than that.
Perpetual Existence: A producer company has perpetual existence which means company will continue until it is legally dissolved. Producer company being a separate legal person is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.
Generally, 15-20 days. In some cases it take longer depending on all the final documents we receive and further subject to MCA due diligence
The formation and regulation of Producer Company Registration is governed under the provisions of Sections 581A to 581ZL of Companies Act, 1956, read with Companies Act, 2013, and the rules made thereunder.
As the name of the Company ends with Producer Company Limited, it seems to be a Public Company but as per clause (5) of the section 581C of Companies Act, 1956, on registration the Producer Company shall become a body corporate as if it is a Private Company and shall not under any circumstances deemed to be a Public Company
A person being a “producer” or a “producer institution” (whether incorporated or not) can be admitted as member of Producer Company. Here “Producer” means any person engaged in any activity or connected with or relatable to any primary produce and primary produce of farmer is defined as produce of farmer arising from agriculture including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, revegetation, bee raising and farming plantation products), or from any other primary activity or service which promotes the interest of the farmers or consumers or produce of persons engaged in handloom, handicraft and other cottage industries or any product resulting from any of the above activities, including by-products of such products.
As per section 581V of the Companies Act, 1956, meetings of the Board shall be held not less than once in every three months and at least four such meetings shall be held in every year. Basically, as per section 173 of companies Act, 2013, Producer Company shall hold 4 Board meetings in a calendar year and gap between 2 Board Meetings shall not be more than 120 days,
A Member of a Producer Company may, after obtaining the previous approval of the Board, transfer the whole or part of his shares along with any special rights, to an active Member at par.
As per Section 581ZB of the Companies Act, 1956, the share capital of a Producer Company shall consist of equity shares only. The shares held by a Member in a Producer Company, shall as far as may be, in proportion to the patronage of that company. Here “patronage” means the use of services offered by the Producer Company to its Members by participation in its business activities. “Patronage bonus” means payments made by a Producer Company out of its surplus income to the Members in proportion to their respective patronage.
The Board may constitute such number of committees as it may deem fit for the purpose of assisting the Board in the efficient discharge of its functions provided that the Board shall not delegate any of its powers or assign the powers of the Chief Executive, to any committee.
We are a registered Firm since 2016 and have helped register hundreds of Producer Companies. We also have the team of professional who understands the requirement of its clients and helps them to achieve their goals. Give wings to your agriculture business with Compliance Calendar LLP and register your Producer Company today.