A Producer Company registration in India is a unique legal entity that enables farmers, producers, and agriculturists to collectively manage, market, and sell their produce. Introduced under the Companies Act, 1956 (amended by the Companies Act, 2013), the concept aims to enhance the socio-economic status of small producers and farmers by forming collective organizations. This business model is designed to empower those involved in agriculture, livestock, forestry, or similar areas, allowing them to integrate production, marketing, and processing for mutual benefit.
In this article, we’ll explore the process, requirements, and benefits of registering a Producer Company in India, along with the essential guidelines and regulations that govern its operation.
What is a Producer Company Registration in India?
A Producer Company registration in India is a corporate body established to manage the needs of producers such as farmers, artisans, and other rural producers. It operates under the Companies Act, 1956 (Sections 581A to 581Z), which was later updated by the Companies Act of 2013. The primary goal is to assist producer members in bettering their income, managing collective production, and marketing their produce.
Key areas where Producer Companies operate include:
Agriculture and Horticulture: Growing, harvesting, and selling crops.
Animal Husbandry: Breeding livestock and selling animal products.
Forestry: Activities related to forest resources.
Handicrafts: Production and marketing of local handicrafts.
Fisheries: Catching and selling fish or other aquatic products.
The members of a Producer Company registration in India must be primary producers or individuals who actively participate in the production process.
Benefits of Forming a Producer Company Registration In India
Collective Efficiency: By uniting multiple small producers, a Producer Company improves their bargaining power, helping them achieve better prices and access to markets.
Limited Liability: The liability of members is limited to the extent of their shareholding in the company, protecting individual producers from undue risk.
Democratic Governance: Like cooperatives, each member of a Producer Company registration in India has equal voting rights regardless of their shareholding, promoting transparency and equality in decision-making.
Profit Distribution: Profits can be distributed as dividends to members based on their shareholding, providing additional financial benefits.
Access to Resources: Producers can collectively invest in essential resources such as machinery, storage facilities, and processing units, which would otherwise be too expensive for individual farmers.
Government Support: The government offers various incentives, subsidies, and schemes to support the establishment and operation of Producer Companies.
Legal Requirements for Producer Company Registration In India
- Minimum Requirements
To register a Producer Company registration in India, certain legal and procedural requirements must be met:
Minimum 10 members: A minimum of 10 individual producers is required, or two or more producer institutions can come together for Producer company registration in India
Directors: The company must have a minimum of five directors and a maximum of 15.
Authorized Capital: A Producer Company must have a minimum paid-up capital of ₹5 lakh.
Shareholders: Only producer members can own shares in the company. Each member’s shareholding is linked to the volume of their contribution. - Documentation
To proceed with the registration for producer company registration in india, the following documents are required:
PAN Card of all members and directors.
Proof of Identity (Aadhar card, Voter ID, or Passport) of all directors.
Proof of Address (electricity bill, rent agreement, or property deed) for the registered office of the company.
Director Identification Number (DIN) and Digital Signature Certificate (DSC) for all directors.
A No Objection Certificate (NOC) from the owner of the registered office if the space is rented.
Process of Registering a Producer Company in India
The following steps outline the registration process: for a producer company registrstion in India
Step 1: Obtain DSC and DIN
The first step in registering any company in India, including a Producer Company, is obtaining the Digital Signature Certificate (DSC) for the proposed directors. DSC is necessary for filing forms online with the Ministry of Corporate Affairs (MCA).
After obtaining the DSC, the Director Identification Number (DIN) can be acquired through the SPICe+ form on the MCA portal.
Step 2: Name Reservation
A unique name must be selected for the Producer Company. The name should align with the company’s objectives and adhere to the Name Guidelines prescribed by the MCA.
The name reservation application is submitted through the SPICe+ Part A form on the MCA website. Once approved, the company can proceed with further registration steps.
Step 3: Drafting MOA and AOA
The Memorandum of Association (MOA) and Articles of Association (AOA) are the core documents that define the company’s objectives, operational rules, and governance structure. The MOA should highlight the producer members’ involvement, while the AOA should outline the company’s internal management rules.
The MOA and AOA must comply with the Companies Act provisions for Producer Companies.
Step 4: Filing Incorporation Documents
Once the name is approved and the MOA and AOA are ready, the company must file the SPICe+ Part B form on the MCA portal for incorporation.
Along with the SPICe+ form, the following attachments must be submitted:
MOA and AOA
Identity and address proofs of directors and shareholders
Consent to act as a Director in Form DIR-2
NOC from the registered office’s property owner
Step 5: Issue of Certificate of Incorporation
Once the incorporation documents are verified, the Registrar of Companies (RoC) will issue the Certificate of Incorporation (COI). The COI signifies the official formation of the Producer Company.
The company will also receive a Corporate Identification Number (CIN) and a Permanent Account Number (PAN).
Step 6: Commencement of Business
After receiving the Certificate of Incorporation, the Producer Company can officially commence its business operations.
The company is required to open a bank account in its name and deposit the paid-up capital.
Additionally, the Producer Company must apply for other mandatory registrations such as GST, ESI, Provident Fund, and Professional Tax if applicable.
Governance and Operational Structure for Producer Company Registration In India
A Producer Company Registration in India is governed democratically with one member, one vote. This means that irrespective of the number of shares a member holds, they have equal voting rights, promoting fairness in decision-making.
Board of Directors: The Board is responsible for the day-to-day management of the company and ensuring that the company meets its objectives. The directors are elected by the members and serve a term that can be renewed.
Annual Meetings: Like other companies, Producer Companies are required to conduct Annual General Meetings (AGMs), where the directors present the company’s financial statements, policy decisions, and any future plans.
Profit Distribution: Profits earned by a Producer Company can be distributed to members in the form of dividends based on their participation, or it can be reinvested into the company for development purposes.
Conclusion
Registering a Producer Company in India offers numerous benefits, especially for small-scale farmers and producers looking to collectively improve their income and market access. The legal structure provides limited liability, democratic governance, and enhanced economic opportunities through collective bargaining. By following the registration steps outlined above and adhering to the relevant regulations, producers can form a powerful business entity that ensures long-term sustainability and growth. The Producer Company model not only helps in organizing small producers but also provides a platform for rural development and economic empowerment.