Around 61.5% of India’s population depends upon the agriculture sector for their livelihood. Despite this, the primary concern of farmers is that they are more or less dependent on the government for various kind of funding. They are still lacking in many advanced technologies which other developed countries are following. The rate of suicidal attempts of the farmers in our country is increasing day by day. With a perspective to help the farmers or the producer, the Government of India has placed an expert committee led by Y.K. Alagh to probe into this matter and hence came up with the idea of Producer Company. Here, we will have a look at the Incorporation Procedure for the Producer Company Registration.
What is a Producer Company?
A Producer Company is a company registered under the Companies Act, 2013 to improve the standard of living of the farmers. It has the objective of production, harvesting, pooling and export of goods or services for their benefit. It primarily deals with agriculture and post-harvesting activities.
“Producer Company” is defined as a body corporate which has the activities or objects provided under section 581B and registered as a Producer Company under the Companies Act, 1956.
What are the requirements for the Producer Company Registration?
Under the Companies Act, 1956, a producer Company can be formed by:
- Ten or more individuals
- Two or more institutions
- A combination of 2 or more institutions and ten or more individuals.
What are the Objectives of the Producer Company?
Under Section 581B of the Companies Act, 2013, the objectives of the Producer Company are listed below:
- As per the law, production, grading, harvesting, pooling, marketing, selling, the export of primary production of the members or import of goods or services for their benefit with the condition that the Producer Company can carry on activities specified in the clause either by itself or through other institutions.
- Processing activities such as preserving, brewing, distilling, canning or packaging of the produce of its members.
- It is providing sale or supply of machinery, equipment or consumables to its members.
- Education on mutual assistance to its members
- Assisting the members with technical services and consultancy services, training, research and development and all other activities
- Renewal of land and water resources, generation, transmission and distribution of power relatable to the primary produce.
- Providing insurance to the producers.
- It is providing and promoting techniques of mutuality and mutual assistance to its members.
- Extending credit facilities or any other facilities to its members as specified in the clause (a) to (j).
What are the Documents required for the Incorporation of Producer Company Registration?
- A copy of PAN Card of all the directors
- Passport size photographs of all the directors
- A copy of Identity proof of all the Directors.
- Copy of the Rent agreement (In case of rented property)
- Copy of the Property papers
- NOC (No Objection Certificate) from the Landlord.
What is the Procedure for the Incorporation of a Producer Company?
The Procedure for the Incorporation of a Producer Company is listed below:
The process of incorporation under SPICE+
1. Normal Requirements:
- At Least 10 Producer: Producer who shall incorporate or promote the Company. These promoters can be both an individual or producer institutes.
- 5 Directors at least: these directors must be individual only.
- Usually, in majority of cases the directors and promoters are the same in Companies.
SPICe+ would have two parts :
- Part A – Name Approval
- Part-B- Incorporation of Company
A Producer Company should be given name by using the following suffix – “Producer Company Limited” properly signifying its status of the Producer Company.
PART A- For Name reservation for new companies:
By logging into the MCA website click on Spice + form and fill in the details regarding the type, class and category of company.
Part B- Incorporation of Company
After the approval of name in PART-A then for Incorporation of Company, the applicant shall prepare the below mentioned Documents;
- All the Subscribers should have Digital Signature Certificate.
- DIR-2- Declaration from the first Director together with Copy of Identity Proof and residential address.
- No Objection Certificate from the owner of the property.
- Proof of Office address (by submitting Lease deed or Rent Agreement etc. together with rent receipts);
- Copy of the utility bills of not before two months
- When the subscribers or any director does not have their DIN, then it is mandatory for them to attach their identity proof and residential address
Once all the documents is available the applicant has to fill the information in the e-form “Spice+”. It is obligatory to give the details of PAN & TAN in the Spice+ Incorporation Form .
Preparation of MOA & AOA (Electronic or Physical):
As there are minimum 10 subscribers of Producer Company so the MOA & AOA shall always be a physical MOA & AOA and it shall never be e-MOA or e-AOA.
After proper filing of the SPICE+ form, the applicant has to move on drafting of information in the INC-33 (MOA) and INC-34 (AOA).
After properly filing the SPICE+ form, the applicant shall fill information in the AGILE PRO form. The information common in PART-B and AGILE PRO shall be automatically filled in AGILE Pro. It is a web based form.
- EPFO/ ESIC
- Bank Account
- Fill details of INC-9
Certificate of Incorporation-
The Incorporation certificate shall be generated with PAN, TAN & CIN details.
What are the Benefits of Producer Companies?
- The members of the Producer Company enjoy the bonus shares in the same proportion to the shares held by them.
- After providing the provision for payment of limited return and reserves, a patronage bonus (the bonus which is distributed among the members of the producer company in proportion to their respective patronage) is given to the members of the producer company.
What are the tax benefits enjoyed by the Producer Company?
Under the Section 10 (1) of the Income Tax Act, 1961, the Producer Company are exempted from the Agricultural income. However, the exemption provided varies according to the agricultural activities carried out. Any processing or manufacturing activities, a certain proportion of the income will be taxed while the rest will be considered as tax-free.
To conclude, one can say that the concept of the Producer Company is beneficial for the farmers or the producers. With the incorporation of the Producer Company, the farmers gain access to input, credit, production technology, market etc. Also, the farmers facing a struggle for their survival have experienced a sigh of relief after the introduction of Producer Company. For any assistance related to the Producer Company Registration, reach us at Corpbiz.