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WHO CAN FORM A PRODUCER COMPANY?

WHO CAN FORM A PRODUCER COMPANY?

A Producer Company in India can be formed by ten or more primary producers, or two or more producer institutions, or a combination of both. These primary producers could be individuals or entities engaged in agricultural activities or the production of primary produce. The formation process involves filing an application with the Registrar of Companies, along with a detailed business plan. Producer Companies are designed to promote the economic interests of their members, enhance production efficiency, and facilitate better access to markets and resources for agricultural and allied activities. Visitofficialwebsite

Objectives of a Producer Company:

Producer companies are formed with the following objectives in mind:

  1. Promoting the Interests of Producers: Producer companies are established to protect and promote the interests of their members, who are primarily producers involved in agricultural or non-agricultural activities.

  2. Economic Upliftment: They aim to improve the economic condition of their members by ensuring better access to markets, technology, credit, and other resources.

  3. Capacity Building: Producer companies work towards the capacity building of their members, helping them acquire knowledge and skills that can enhance productivity.

  4. Market Linkage: Facilitating market linkage is a crucial objective, ensuring that the produce of members can reach a wider market, often at more competitive prices.

  5. Promotion of Sustainable Practices: Many producer companies also focus on promoting sustainable agricultural and production practices, which are both environmentally and economically viable.

    1. Collective Bargaining Power: Through collective action, producer companies help members achieve better prices for their produce and negotiate favorable terms with buyers.

Eligibility Criteria for Forming a Producer Company:

To form a producer company in India, certain eligibility criteria must be met:

  1. Minimum Members: A producer company must have at least ten active members, and these members can be individuals or institutions. For agricultural producer companies, these members should be primarily engaged in agricultural activities.

  2. Registration: The entity must be registered under the Companies Act, 2013, with a minimum paid-up capital as required by the Act.

  3. Members’ Primary Source of Income: In the case of a producer company, the primary source of income of its members must be from primary production activities such as farming, horticulture, animal husbandry, fishing, or other primary production activities.

  4. Area of Operation: Producer companies can operate in one or more states, but their operations are restricted to the activities specified in their memorandum of association.

  5. Profit Motive: Producer companies are allowed to earn profits and distribute them to their members, but the main purpose must be to benefit their members.

Formation Process of a Producer Company:

The formation of a producer company involves several steps:

  1. Promoters’ Meeting: The first step is to convene a meeting of the initial promoters or members who wish to form the producer company. The purpose of this meeting is to discuss and finalize the objectives, name, and location of the company.

  2. Drafting the Memorandum of Association (MOA) and Articles of Association (AOA): The MOA and AOA are the key documents that outline the objectives, rules, and regulations governing the producer company. These documents must be prepared as per the format provided under the Companies Act.

  3. Application for Name Reservation: An application for the reservation of a unique name for the producer company must be made to the Registrar of Companies (ROC). The name should include the words “Producer Company Limited” or “Producer Limited.”

  4. Filing Incorporation Documents: Once the name is approved, the next step is to file the incorporation documents with the ROC. These documents include the MOA, AOA, a declaration by the promoters, and other necessary forms.

  5. Incorporation Certificate: Upon successful scrutiny of the documents and compliance with all legal requirements, the ROC issues an incorporation certificate, indicating that the producer company is now a legal entity.

  6. Commence Business Activities: After obtaining the incorporation certificate, the producer company can commence its business activities.

  7. Membership Drive: The company can now start admitting members as per the eligibility criteria and terms outlined in its MOA and AOA.

  8. Conducting Meetings: Producer companies must conduct regular meetings, including annual general meetings, to discuss financial statements, reports, and other relevant matters.

Who can form a producer company

FORMATION OF PRODUCER COMPANY AND ITS REGISTRATION (1) Any ten or more individuals, each of them being a producer or any two or more Producer institutions, or a combination of ten or more individuals and Producer institutions, desirous of forming a Producer Company having its objects specified in section 581B

What is a producer company under Companies Act 2013

A Producer Company is formed by a minimum of 10 individuals or two or more institutions, with at least 5 directors, and it is a separate legal entity. Members of the Producer Company have limited liability, and the liability of the company is limited to the extent of its assets.

Who can form a producer company other than farmers producers

A Producer Organisation (PO) is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen. A PO can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/benefits among the members.

Can producer company be a small company

Minimum number of producers required to form a PC is 10 while there is no limit for maximum number of members and the membership can be increased as per feasibility and need. This helps even 10 individuals start a Producer Company which is easy.

How do I register as a producer company

  1. Obtaining a Digital Signature Certificate (DSC)
  2. Obtaining a Director Identification Number (DIN)
  3. Obtaining the company’s name.
  4. Drafting the Memorandum of Association (MoA) and Articles of Association (AoA)

What is the difference between FPO and producer company

Producer Organizations are legal entities that can be formed by primary producers such as farmers, fishermen, milk producers, artisans, etc. The producer organization in which all the members are farmers is known as Farmer Producer Organization or FPO

What are the benefits of producer company

  • Separate Legal Entity: …
  • Tax Benefits: …
  • Simple Management: …
  • Loans and Investment: …
  • Continuous Existence: …
  • Good Governance: …
  • Financial Support: …
  • Empowering Members:

Documents required for incorporation of FPO (Farmers Producer Organization)

For each Director and Shareholder:

  • Identity proof
    • Passport copy ( Mandatory if held)
    • PAN copy (Mandatory for Indians)
    • In case an Indian does not have a passport:
    • Voters ID card
    • Driving License
 
  • Address proof
    • Anyone of:
      • Bank statement
      • Phone bill
      • Mobile bill
      • Electricity bill

What are the formalities to register a new company in india

As of my last knowledge update in January 2022, registering a new company in India involves several formalities. Please note that procedures and requirements may change over time, so it’s essential to verify the latest information with the relevant authorities or a legal professional. Here is a general overview of the formalities for registering a new company in India:

  1. Selecting the Type of Company: Determine the type of company you want to register. In India, common choices include Private Limited, Public Limited, Limited Liability Partnership (LLP), and One Person Company (OPC).
 

2. Name Approval: Apply for name availability with the Registrar of Companies (ROC). The name must be unique and compliant with naming guidelines set by the Ministry of Corporate Affairs (MCA).

3. Digital Signature Certificate (DSC): Obtain a Digital Signature Certificate for the proposed directors and subscribers. It’s required for filing electronic forms with the ROC.

4. Director Identification Number (DIN): Directors must obtain a DIN, which is a unique identification number required for company incorporation.

5. Memorandum and Articles of Association: Draft the Memorandum of Association (MOA) and Articles of Association (AOA), which outline the company’s objectives and rules. These documents must be signed by the subscribers.

6. Filing Incorporation Documents: Prepare and submit the necessary incorporation documents to the ROC, including the MOA, AOA, and other required forms.

7. Payment of Fees: Pay the prescribed fees for registration and stamp duty, which can vary based on the authorized capital of the company.

8. Certificate of Incorporation: Once the ROC approves your application and documents, you’ll receive a Certificate of Incorporation. This signifies the legal existence of your company.

9. PAN and TAN: Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for your company. These are essential for tax purposes.

10. Bank Account: Open a bank account in the name of your company and deposit the minimum required capital.

11. Goods and Services Tax (GST) Registration: If your company’s annual turnover is above the threshold limit, you must register for GST.

12.Professional Tax Registration: Some states in India require companies to register for professional tax.

13. ESI and PF Registration: If your company employs a certain number of employees, you may need to register for the Employees’ State Insurance (ESI) and Employees’ Provident Fund (EPF) schemes.

14. Trade License: Depending on your business’s nature and location, you may need to obtain a trade license from the local municipal authority.

15. Compliance with Other Regulatory Bodies: Certain industries or business activities may require additional licenses or permits from sector-specific regulatory authorities.

16. Annual Filings: After registration, companies must comply with various annual filing and compliance requirements, including financial statements and annual returns.

It’s essential to consult with a qualified chartered accountant, company secretary, or legal expert to ensure that you meet all the specific requirements and formalities for your particular business and jurisdiction. Additionally, please verify the latest procedures and regulations with the Ministry of Corporate Affairs (MCA) or relevant authorities in India, as they may have changed since my last update in January 2022.

Benefits of Establishing a Producer Company:

Forming a producer company offers various advantages, both for the members and for the community:

  1. Limited Liability: Members enjoy the benefit of limited liability, meaning their personal assets are safeguarded from business debts and obligations.

  2. Collective Strength: Producer companies enable members to pool their resources, knowledge, and skills, leading to collective strength in the market.

  3. Access to Credit: They can access credit and financial assistance more easily as a group, making it easier to invest in modern agricultural or production techniques.

  4. Market Access: Producer companies facilitate better access to markets and reduce the dependence on intermediaries, resulting in better price realization for the produce.

  5. Training and Capacity Building: Members receive training and capacity-building support, enhancing their skills and knowledge.

  6. Profit Distribution: Profits earned by the company can be distributed among members, directly contributing to their economic well-being.

  7. Sustainable Practices: Producer companies can promote sustainable agricultural and production practices that benefit both the environment and the community.

  8. Tax Benefits: They may also be eligible for certain tax benefits and incentives under government schemes.

Conclusion to form producer company

Producer companies are a vital tool for the economic empowerment of small and marginal farmers, as well as individuals engaged in primary production activities. The process of forming a producer company involves specific eligibility criteria and a series of steps, including drafting the MOA and AOA, name reservation, incorporation, and membership drives. The benefits of establishing a producer company are numerous, including limited liability, collective strength, and better market access, ultimately contributing to the economic well-being of the members and the sustainable development of the community. By promoting the formation of producer companies, India and other countries can empower producers and enhance the agricultural and primary production sector.

How auriga accounting help you to form a producer company

Auriga Accounting.” However, I can provide a general overview of how an accounting firm or service can assist you in forming a producer company. Please note that you should research and contact Auriga Accounting directly or any other specific accounting service for the most up-to-date and relevant information about their services.

Here are ways in which an accounting service can help you form a producer company:

  1. Legal Structure and Compliance: Accounting firms can provide guidance on choosing the appropriate legal structure for your producer company, whether it’s a private limited company, public limited company, or any other structure. They will help ensure that you meet all legal requirements and compliance obligations.

  2. Business Registration: They can assist in registering your producer company with the appropriate government authorities, including filing the necessary paperwork and documentation. This includes obtaining the necessary certificates and licenses.

  3. Memorandum and Articles of Association: Accounting professionals can help draft the Memorandum of Association (MOA) and Articles of Association (AOA) in compliance with the Companies Act and specific guidelines for producer companies.

  4. Name Reservation: They can handle the process of reserving a unique name for your producer company, ensuring that it complies with the legal requirements and guidelines.

  5. Taxation and Financial Planning: Accounting firms can help you structure your producer company in a tax-efficient manner. They can provide advice on how to manage your finances, handle tax compliance, and optimize your financial strategy.

  6. Compliance with Regulatory Authorities: They will ensure that your producer company complies with all relevant regulations and statutory requirements. This includes tax, labor laws, and other industry-specific regulations.

  7. Bookkeeping and Accounting Services: Accounting firms can provide ongoing bookkeeping and accounting services to ensure that your financial records are maintained accurately and in compliance with applicable standards.

  8. Audit and Assurance Services: They can offer audit and assurance services to ensure that your financial statements are accurate and reliable. This can be essential for building trust with stakeholders and investors.

  9. Advisory Services: They can provide strategic financial and business advice to help your producer company grow and succeed. This may include financial forecasting, budgeting, and investment strategies.

  10. Corporate Governance: Accounting firms can assist in establishing strong corporate governance practices to ensure transparency and accountability within the producer company.

July 8, 2024

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