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PRODUCER COMPANY
A producer company is basically a company registered to deal with the primary production, harvesting, procurement, grading, pooling, handling, marketing, selling, the export of primary produce of the Members related to farming or import of goods or services for their benefit. Hence, a producer company at first deals with agriculture and post harvesting activities. Producer companies were introduced to empower farmers. In a producer company, you can appoint agricultural members and accept deposits in the form of RD/FD and provide them maturity as well as distribute loans to your farmer members and charge interest from them.
Producer companies can be formed with ten or more producers or two or more producer institutions or a combination of 10 or more producers. It should have equity capital and it also requires a minimum of five directors and also authorized capital of Rs. 5 lakh. However, you need to keep in mind that a producer company cannot be converted into a public company but can be converted into a multi-state co-operative society.
The process of registering a producer company is similar to a private limited company. For the purpose of incorporation of producer company you need to ensure and abide by Part IXA of Companies Act, 1956 which is applicable until any special Act is enacted for such companies.
Benefits of Opting for a Producer Company?
SEPARATE LEGAL ENTITY : A Producer company is considered as a separate legal entity and it can hold property in its name, borrow in its name, etc.
LIMITED LIABILITY : The members are not liable for the creditors of the company. as the company is considered to be separate than the members.
NO CLAIM ON PROPERTY OF COMPANY : No member has any right to claim the property of a Producer Company as far as it is a going concern.
PERPETUAL SUCCESSION : The existence of a producer company does get affected for any reason like departure from the position or even death of any member.
CREDIBILITY : A Producer Company is managed by the central government when compared to mutual benefit organizations that are registered and monitored by state governments. Because the same producer company enjoys greater credibility in the market.
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Pricings
STARTUP
25989
- 10- CLASS -3 DIGITAL SIGNATURE
- 10- DIN
- 1 RUN NAME APPROVAL*
- UP TO 15 LAKH AUTHORISED CAPITAL
- INCORPORATION FEE
- STAMP DUTY*
- CERTIFICATE OF INCORPORATION
- GST REGISTRATION
- EPF & ESI REGISTRATION
- PAN & TAN
- SHARE CERTIFICATE
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Executive
35989
- 10- CLASS -3 DIGITAL SIGNATURE
- 10- DIN
- 1 RUN NAME APPROVAL*
- UP TO 15 LAKH AUTHORISED CAPITAL
- INCORPORATION FEE
- STAMP DUTY*
- CERTIFICATE OF INCORPORATION
- GST REGISTRATION
- EPF & ESI REGISTRATION
- PAN & TAN
- SHARE CERTIFICATE
- 6 MONTH EPF & ESI FILING
- BOARD RESOLUTION PREPARATION
- ACCOUNTING SOFTWARE
- 6 MONTH GST RETURN FILING
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PREMIUM
45989
- 10- CLASS -3 DIGITAL SIGNATURE
- 10- DIN
- 1 RUN NAME APPROVAL*
- UP TO 15 LAKH AUTHORISED CAPITAL
- INCORPORATION FEE
- STAMP DUTY*
- CERTIFICATE OF INCORPORATION
- GST REGISTRATION
- EPF & ESI REGISTRATION
- PAN & TAN
- SHARE CERTIFICATE12 MONTH EPF & ESI FILING
- BOARD RESOLUTION PREPARATION
- ACCOUNTING SOFTWARE
- UDHYAM REGISTRATION
- 1 YEAR DEDICATED COMPLIANCES SUPPORT
- DIRECTOR REPORT
- 1 YEAR MCA ANNUAL FILING
- 1 YEAR INCOME TAX RETURN FILING
- TRADEMARK FILING
- 1 YEAR GST RETURN FILING
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Advantages
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Members will initially receive value for the produce or products pooled and supplied as the directors may determine. This amount is given out later either in cash or in kind or by allotment of equity shares. Members will be eligible to receive bonus shares in proportion to the shares held by them.
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The Indian Income Tax Act, 1961(“the IT Act”) specifically exempts taxes on agricultural income under section 10(1). However, the exemption for such agricultural income shall sometimes differ on the basis of the kind of agricultural activity undertaken.
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The members of the Producer Company are primary producers, and thus, are in need of financial assistance from time to time. Hence, a special provision is made by the Act 61 of Producer Company of giving loans to its members.
Disadvantages
Lack of capital is an irresistible problem in the case of producers’ cooperative society. The members of these cooperatives are not capitalists.
This business doesn’t operate properly to earn a profit. Besides, the members can’t get the dividend entirely. That’s why they feel a lack of motivation.
Illiteracy problem also hurts in this organization. Most of the members of this organization are illiterate, which creates an alarming condition of the organization. This organization can’t improve rapidly because of this illiteracy problem
FAQs Section
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There is no minimum amount of capital required to start a producer company, however, you should at least have the money to start and run the business.
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The registration of your name can be done by filing an application in web-form called “RUN” with a maximum of 2 unique names.
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Yes, NRI or Foreign National can be a Director after obtaining a DIN Number also it is mandatory that the producer companies one of the Board of Directors must be an Indian citizen and a resident.
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A minimum of 5 people is required to start a producer company in India.
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Once a producer company is incorporated then its registration is valid until the company abides by every compliance.
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The producer companies' book needs to be audited from its very first year. And if turnover crosses Rs. 5 crore, the company is liable to employ a full-time company secretary to manage its affairs.
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