Producer Company Registration

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Introduction

A Producer Company is basically a corporate body having the objects or activities relating to primary production as specified under the Act. In a producer company, a group of people related to farming and its selling/exporting also.

The Incorporation of this entity is governed by the Part IXA of Companies Act, 1956 and any other law for the time being in force until any special Act is framed. The producer company can also lend loans to its members subject to the conditions.

To form such entity ten or more member are required being the producers; or any two or more producer institutions; or its combination thereof. A Producer Company enjoys all the benefits which are available to any other Company like the liability of its members is limited to the extent of unpaid share capital by its members. It is generally deemed as Private Limited Company.

Advantages

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Advantages of Producer Company

Separate Legal Entity

Once an entity is registered it is born in the eyes of law which means it is separate from its owners, Directors, Managers, shareholders and employees etc. It can operate simply by its bank account and also provides the right to file case against third parties in case of wrongful act.

Limited Liability

The liability of the Members is limited to the extent of Capital invested by them in the Company and therefore, they cannot be held personally liable for the debt and obligations of the Company. Therefore, the liability of the members is limited to the amount, if any unpaid on shares.

Beneficial for Members

Initially every member can only receive the value of the produce as decided by the Board. The withheld price may be disbursed after some time in form of cash or by allotment of equity shares. Limited return is provided to the Members but can also be allotted the bonus shares. The surplus can also be disbursed as patronage bonus.

Special User Rights

Active members of the producer company are provided the special user rights, if so authorized by the Articles of Association of the company. It is the right relating to the supply of additional produce by the active members of the Company for which appropriate instruments are issued to active members in respect of such rights.

Minimum

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Minimum Requirements

Minimum Five persons as Director and maximum fifteen
Minimum ten or more individual and each one of them being persons as Members; or two or more producer institutions or combination thereof.
In case of foreign Entity or individuals opting to incorporate Producer Company; Minimum one Director shall be Indian resident

Documents

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Documents Required for Incorporation

PAN Card

of the Member and Directors of the proposed Company

Passport

in case of Foreign Nationals

Identity Proof

of the Member and Directors of the proposed Company (Aadhar /Voter ID/Driving License/Passport)

Address Proof

the Member and Directors (Utility Bill/Telephone Bill/Mobile Bill/Bank Statement not older than two months)

Latest

passport size photograph of Member and Directors

Producer Card

of Members

Business Address Proof

Owned Property : (Copy of Registry and Latest Govt. Electricity Bill or Water Bill)

Rented/leased

(Rent Agreement, NOC from the Owner, Latest Govt. Electricity Bill or Water Bill)

Process

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Process of Incorporation of Nidhi Company

1. Complete the Application Form

You are requested to first fill the simple questionnaire provided by our expert team.

Step 01

2.Document Processing

At the second step we will be requiring the documents in accordance with the questionnaire filled by you so that we can arrange them as per the requirement and for processing.

Step 02

3. Application for DSC

First of all DSC (Digital Signature Certificate consisting of the E-signatures) is required to be prepared. This step can be ignored if prepared already. It will approximately take 1-2 days.

Step 03

4. Name Availability

The next step is to check the name availability. The name should be unique in nature and should not be similar to name of any other entity registered. It may take at least 1-2 days.

Step 04

5. E-filing for incorporation of a Company

Once the name is approved, an online application is required to be filed through SPICE+ along with the requisite documents as obtained from the client with ROC. The MOA as well as AOA shall be filed online. This process again takes approximately 2-3 days.

Step 05

6. Get Certificate of Incorporation

Once the Company gets incorporated we will share all the docs like Incorporation Certificate, MOA, AOA and Digital Signatures.

Step 06

Registration

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Post Registration Requirements

Minimum 200 Members should be there within 120 days of incorporation

Net Owned Funds should be 20 Lakh Rupees or more within 120 days.

Unencumbered deposits should be more than 10% of outstanding deposits

The ratio for Net Owned Funds to Deposit should not be more than 1:20

Faq's

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FAQs on Producer Company

How many people are required to form Producer Company?

Minimum five Directors and ten Members agreeing to subscribe the shares of the Company who can be individuals or two producer institutions or combination thereof.

What is the minimum capital requirement to form a Producer Company?

The minimum capital to incorporate a producer company is Rs. 5 Lakhs

A Member is required to deposit the money in the bank account at the earliest and file the form for commencement within 180 days from the date of incorporation of the Company.

Whether it is necessary to have a PAN Card?

Yes, for Indian nationals becoming a Director in a Company it is mandatory to have a PAN Card and Passport in case of Foreign Nationals.

Can a Director or Shareholder be a same person?

Yes, a Director can also become a shareholder and vice versa as a Company is a Separate Legal Entity.

What are the activities allowed for Producer Company ?

Production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit.
Rendering technical services, consultancy services, training, education, research and development and all other activities for the promotion of the interests of its Members;
Generation, transmission and distribution of power, revitalization of land and water resources, their use, conservation and communications relatable to primary produce;
Promoting mutual assistance, welfare measures, financial services, insurance of producers or their primary produce

Can the money deposited in bank account as subscription money be withdrawn?

No, the money cannot be withdrawn but can be used by the Company for official purpose like for paying salary to staff and employees, other administrative expenses etc.

What is Company Registration Certificate?

It is the documentary proof evidencing that the Company has been registered and having its unique identification number as Corporate Identification Number.

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