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PRODUCER COMPANY REGISTRATION

Ideal for farmers and primary producers to help them to gain easy access to credit, production technology, market, and inputs.

Starting at Rs. 13000/- only (all inclusive)

Producer Company Registration

India is an agriculture-based country with around 62% of its people depending directly or indirectly upon agriculture. Indian farmers are completely unorganized and they are not able to use the latest technologies in the agricultural sector production. Due to this, farmers account for 12% of all suicides in India. An expert committee has been set up by the government to look in this matter.

A Producer Company is a company registered with the object of agriculture production, post-harvesting processing activities, procurement, selling and distribution, export of primary production of the members or import of goods for their benefit. The main object of the Producer Company is to deal with agricultural activities and post-harvest processing activities. It is mainly a cluster of farmers who come together to improve their income and standard of living. Producer Company is a kind of body corporate whose main objective is defined under Section 581B of the Companies Act 1956. A producer company is a hybrid between a private limited company and a cooperative society.

Producer Company can be formed only by producer.

What is the meaning of Producer?

Producer means any person engaged in any activity connected with or relatable to primary produce.

“Primary produce” means

(i) produce of farmers, arising from agriculture (including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, re-vegetation, bee raising and farming plantation products), or from any other primary activity or service which promotes the interest of the farmers or consumers; or

(ii) produce of persons engaged in handloom, handicraft and other cottage industries;

(iii) any product resulting from any of the above activities, including by-products of such products;

(iv) any product resulting from an ancillary activity that would assist or promote any of the aforesaid activities or anything ancillary thereto;

(v) any activity which is intended to increase the production of anything referred to in sub-clauses (i) to (iv) or improve the quality thereof;

Member's benefits in the Producer Company

Note: Patronage bonus denotes the surplus income distribution among the producer company members in proportion of their respective patronage. On the other hand, Patronage is the member participation in business activities.

Activities to be undertaken by a Producer Company

If any person is engaged in the aforesaid activities, then such persons can form a Producer Company to pursue any of the following object 

  1. Production, procurement, harvesting, pooling, grading, marketing, handling, selling and export of the primary produce of members. Provided that the Producer Company shall continue these activities themselves or through other institution;
    2. Processing including drying, preserving, brewing, venting, canning, distilling and packaging of the produce;
    3. Manufacture, supply or sale of machinery, equipment or consumables to its members;
    4. Imparting of knowledge on the mutual assistance principles to its members;
    5. Delivering technical services, consultancy services, training and other activities for the promotion of interests of its members;
    6. Insurance of producers and or the primary produce.

FORMATION OF PRODUCER COMPANY

Pre-registration requirements to form Producer Company:

  1. Minimum number of 5 directors and 10 members should be there.
  2. Minimum paid-up capital of Rs. 5 Lakhs is required to form the company.
  3. Company can have as many as members they want as there is no maximum limit of the members.
  4. The Producer Company in India cannot be deemed as a public company.
  5. The former company can have only equity share capital. There should be at-least four boards meeting every year and the meetings should not

What are the advantages of Producer Company Registration in India?

  • Separate Legal Entity

    A producer company is a separate legal entity, and there is a limited liability of its members.

  • Greater Credibility

    Greater credibility is offered by Producer Company as compared to other unregistered organizations of agriculturists or farmers.

  • Easy Management

    Through the filing of simple forms with the concerned ROC, we can make changes in the Board of Management of a producer company swiftly.

  • Owing Property

    Duly registered producer company can sell or own a property in its own name and it is entitled to accept deposits from or give loans to its agriculturist members at very reasonable rates of interest.

  • Deposits Acceptance

    A Producer Company is eligible to accept deposits in the form of recurring deposit or fixed deposit. It can also disburse loan among the members and farmers at a reasonable rate of interest.

What are the provisions regarding loans and investments made by the Producer Company?

Producer Company is formed by the number of individuals who are primary producers and in need of timely financial assistance. Therefore, a special provision was passed as per companies act for loan sanctioning to the members of the producer company.

Financial assistance can be provided to the members of the Producer Company through the following:-

  • Credit facility

The credit facility will be available to a member of the producer company for a period of not more than 6 months.

  • Loans and advances

Loan and advances will be issued to the members against security for a period of not more than 7 years from the date of loan disbursement.

  • NABARD (National Bank for Agriculture & Rural Development) Loan

To meet the requirement of the Producer Company, financial assistance is provided by the NABARD (National Bank for Agriculture & Rural Development). In the year 2011, Producer Organization Development Fund (PODF) of Rs. 50 Crore has been set up by the NABARD out of the NABARD operating surplus.

What are the tax benefits available to Producer Company in India?

Agriculture income is exempt under section 10(1) of the Income Tax Act, 1961. However, this exemption varies on the basis of the agricultural activity carried out. No special tax benefit is provided by the Income Tax Act to the producer companies while certain tax benefits and exemptions can be availed subject to the agricultural activity carried out by the producer company.

For instance, agriculture income is currently 100% exempt. Income generated from the green tea leaves is tax-free while in case tea leaves are used for the purpose of tea manufacturing then 60% income shall be exempt and 40% shall be taxed.

Therefore we can say that tax exemption depends upon the activity carried out.

At the time of patronage bonus and limited return distribution, dividend tax is required to be paid by the Producer Company at the applicable rates and it will be tax-free in the hands of the members.

At the time of Bonus shares allotment, no tax liability will be there in the hands of the members however provisions of capital gain tax shall apply at the time of sale or redemption.

Documents required for Producer Company Registration

Producer Company Registration is completely Online Process. Following are the mandatory self-certified documents for the registration purpose:

You just need to scan and send to our email id at legal.agarwalconsultant@gmail.com

  1. A) From Directors & Members
  1. Pan Card
  2. Election Id Card or Passport
  3. Photographs
  4. Latest Bank Statement or a copy Electricity Bill
  5. Photo
  1. B) Registered Office proof

– Notarized Rent Agreement

– Electricity Bill

– Sale deed in case of owned

Documents submitted must be valid and not more than 2 month old.

The members and directors can be same.

Note – You can register Producer company on your residence address as well.

Package includes

  1. 5 class 2 Digital signatures
  2. 5 Director Identification Numbers
  3. 1 RUN Name Approval
  4. Upto 5 Lakhs Authorized Capital
  5. MOA & AOA
  6. Incorporation Fee
  7. Stamp Duty
  8. Incorporation Certificate
  9. PAN & TAN
  10. GST Registration
  11. ESIC Registration
  12. EPFO Registration

WHY CHOOSE LEGALSAHAYATA?

Low Price

No Office Visit

No Hidden Cost

Charges After Work Completion

Frequently Asked Question

Yes, you need a minimum of five directors to register a Producer Company.

Any individual/organization can become the member of Producer Company including foreigners/NRI’s

The entire procedure is 100% online and you don’t have to be present at our office or any other office for incorporation. A scanned copy of documents has to be sent via mail

There is absolutely no other payment. We will send you an invoice that is all-inclusive, with no hidden charges.

LegalSahayata can incorporate a Producer Company typically in 15-20 days. The time taken also depends on relevant documents provided by the applicant and speed of approvals from government. To ensure speedy registration, please pick a unique name for the proposed Company and make sure you have all the required documents ready, prior to starting the registration process.

Yes, after acquiring DIN/DPIN an NRI or Foreign national can become a designated partner in Producer Company. However, at least one designated partner in the Producer Company must be a Resident of India

Yes. It is necessary to audit books of a producer Company.

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