A producer company is a type of business entity that deals and interacts with agriculture production, and post-harvesting activities. These companies are formed to promote the business investment, management, and financial effect of their producers, who are generally farmers or agricultural producers. Farmer-producer companies are formed to provide better access to credit, technology, and markets. A producer company can be typically outlined as agriculturists and farmers to promote their standard of living and guarantee their incomes and profit. A Producer company's primary goal is stated in Section 581B of the Indian Companies Act of 1956. A Producer company's primary goal comprises agricultural endeavors and activities carried out after harvest. In order to increase their income and standard of living, farmers and growers form the bulk of the Producer Company.
The key attributes of Farmer-producer company:
- Limited liability: Like other companies, farmer-producer companies also have limited liability to their share capital.
- Membership: It requires a minimum of 10 individuals or two institutions together to form a producer company. Institutions involved in agriculture procedures, production, procurement, or marketing.
- Profit-oriented: Producer Companies are aimed to generate profits from their activities. These are profit-oriented entities and their primary objective is to improve the economic conditions of their members.
- Tax benefits: Farmer-producer companies may enjoy certain tax benefits and incentives such as rebates from taxes and subsidies.
Documents required for Producer company approval:
- PAN card of the directors
- Passport-sized photographs
- Identity proof
- Rent agreement, if the property is rented.
- Property documents from the owner, if company-owned property.
- NOC from the owner.
The procedure of producer company formation:.
- Get DSC: For all of the recommended directors, the first step is to obtain a digital signature certificate, which is required to electronically sign papers.
- Name approval: Fill out the "Reserve Unique Name" form and send it to the Registrar of Companies (ROC) together with the required cost in order to register the producer company name. The producer company name is approved by the ROC if the Name is accessible.
- File application of company commencement: An application for incorporation must be submitted within 20 days of the Name's approval. Following name approval, a SPICE form incorporation application is submitted to the Registrar of Companies along with all required supporting documentation, such as a MOA, AOA, affidavit, and declaration.
- Certificate of incorporation: After carefully reviewing the incorporation form, the Registrar of Companies issues the Certificate of Incorporation. It takes about 7 days to complete this operation.
Benefits of registering with a Farmer-producer company:
- Separate legal entity- The members of the Producer Company have limited liability and act as a single legal entity.
- Easy and stress-free management: The board of management is very simple. This can be done immediately by filing a simple form with the Registrar.
- Better credibility: Producer company offers more credibility to agriculturists or farmers.
- Accept deposits: A farmer-producer company accepts payments through fixed and recurring deposits. These companies can facilitate loans to farmers at rational rates of interest.
- Power to own property: A producer company has the right to buy or sell a property with its name for different purposes.
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You need to know before begin everything.
Any individual or organization can become a member of Farmer-producer organizations.
No, the registration process is online, and there is no need to be physically present during the approval procedures. You just need to provide the requisite documents, which proceed for online verification.
No payment or charges are required other than registration expenses.
No minimum capital requirement is needed to set farmer-producer organizations.