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.
What are the requirements for the Producer Company Registration?
- 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:
- Obtain the DSC
The first step is to obtain the DSC (Digital Signature Certificate) of all the Directors.
The steps involved in selecting the name of the company are as follow:
- File Form RUN (Reserve Unique Name) to the ROC (Registrar of Companies) by providing 2 names in the order of their preference.
- The name of the company should end with the words “Producer Company”.
- After the approval of the name by ROC, you need to prepare the following documents;
- MOA (Memorandum of Association) of the company by incorporating the objects the company intends to follow.
- AOA (Articles of Association) containing all the bye-laws of the company.
- An affidavit needs to be signed by all the subscribers of the proposed by the company.
- Copy of the utility bills and a NOC (No Objection Certificate) from the owner whose address will be used as the registered office of the company.
- If the registered office is on the lease, then a legal agreement will be attached to the form.
- All the documents which are drafted for the purpose of incorporation will be attached to the SPICe. Now all these documents will be uploaded on the ROC website.
- After the proper verification of the documents, the Registrar of Companies will issue a Certificate of Incorporation, and after that, the Company can start its business.
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.