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What is Producer Company ?
Producer Company, The agricultural industry is the backbone of the Indian economy. Nearly 60% of India’s population depends on agricultural activities for their livelihood. The concept of Producer Company in India was introduced for registering a Producer Company, under the Companies Act, 2013. A Producer Company is an amalgamation of a Private Limited Company and a Cooperative society. It is a legally formed group of agriculturists/farmers who objects to improve their income status and the standard of their living and ensure a good status of their available support. The objective of the Producer Company is production, harvesting, procurement, grading, pooling, handling, marketing, selling, the export of primary production 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.
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Eligibility for Producer Company Registration
Section 581B and Section 3 of Companies Act, 1956 prescribes that a Producer company
- Shall have a minimum of 5 directors and maximum up to 15
- Shall have director/s an Indian resident or a non-resident
- At least 10 members with no maximum limit.
- Shall have minimum capital not other than equity share capital of 5 lakh required
- Shall not be deemed as a public company
- A director can be a member of the company or vice versa.
** Director: – Section 2 (34) of the Act prescribed that “director” means a director appointed to the Board of a company. A director is a person appointed to perform the duties and functions of the director of a company under the provisions of the Companies Act, 2013.
** Member: – Section 41 of the Act Defines that ” member” the subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration, shall be entered as members in its register of members.
Key Features & Benefits of Producer Company
Separate Legal Existence
A Producer Company has a separate legal existence than that of its member and is liable to the full extent of its assets.
The Liability of a member of a Producer Company is limited to the extent of the company’s assets and does not fall on his/her assets like houses, cars, personal savings, etc.
A Registered Producer Company has greater goodwill and standing in the market in comparison to the unregistered organization of farmers.
Dispute Relating to producers companies are to be settled by conciliation or arbitration under the Arbitration & Conciliation Act, 1996 as if the parties to the dispute have consented in writing to such procedure.
Acceptance Of Deposits
A registered producer company can accept deposits in the form of fixed or recurring deposits.
A producer company can easily disburse loans to the members and farmers at a reasonable interest rate.
Producer Company Registration Process
Documents Required for Registering a Producer Company
- PAN and Aadhar Card of the Directors.
- Voter Identity card or Driving license of the Directors.
- Copy of the Latest Bank Statement or Bank Passbook of the Directors.
- Passport Size Photograph of the Directors.
- Email I’d & Mobile Number of the Directors.
- Registered Office Address Proof:
- Owned office:- Copy of electricity bill/water bill/Telephone bill or property tax receipt.
- Rented office:- Rent agreement and NOC (No objection certificate) from the owner along with electricity bill/water bill/Telephone bill or property tax receipt.