Producer companies’ conception was introduced in the year 2002, by the recommendations made by an expert committee, led by an economist Y.K Alagh, that was appointed by the Government of India to address the problems faced by primary producers and farmers.
The concept of a Producer Company is prescribed under section 581 (B) of the Companies Act, 1956, which states that a producer company is incorporated under the Companies Act, 1956 and has the joint goals of agriculture production, post-harvesting processing activities, import and export of goods, procurement, selling & distribution, initial production of the individual members potential to earn extra earnings. Since the concept entered the Indian economy, it has helped primary producers gain access to input, credit, production technology, market, etc. A person being a “producer” or a “producer institution” (whether incorporated or not) can be admitted as a member of the Producer Company. In this article, we’ll discuss the entire procedure of Producer Company registration and the documents required for the same.
Conditions
In order to form a Producer Company, a few conditions are required to be fulfilled –
➠ Producer Company can be formed by 10 or more Individuals as producers OR two or more producer institutions OR a combination of 10 or more producers and producer institutions.
➠ There is no maximum limit for the members.
➠ In India, a Producer Company cannot be deemed a public company.
➠ A minimum capital of Rs. 5,00,000 is required to incorporate a Producer Company.
➠ Share capital of the Company shall consist of equity shares only.
➠ Shares held by a member of the company, shall be in proportion to the backup of that company.
➠ There should be a minimum of 5 directors and a maximum of 15 directors in the company.
➠ The board must appoint a full-time chief executive officer (CEO)
Documents Required
➠ Identity proof of members, such as Voter’s ID/Passport/Driver’s License
➠ PAN Card
➠ Passport for NRIs or foreign nationals
➠ Current Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
➠ Members photograph
➠ Digital Signature Certificate (DSC) from all the directors.
➠ DIN ( Director Identification Number)
➠ A utility bill and a NOC have to be taken from the owner whose address is to be used as the registered office of the company. If it is not owned, a lease agreement will be attached to the form.
Registration Procedure
The registration process is simple. And you can also apply for online registration. First of all, the members need to have their own DSC (Digital Signature Certificate). Then they need to apply for a DIN ( Director Identification Number) and later have to get your company’s name approved followed by submission of an application for incorporation.
Step 1: Getting Digital Signature Certificate (DSC)
For ensuring the security or authenticity of documents filed electronically the information act 2000 demands a valid digital signature on the documents submitted electronically. This is the only and safest way that one can submit their documents electronically. The digital signature certificate is very important for producer company registration and should be acquired by only those agencies which are appointed by the controller of certification agencies (CCA). One should not use DSC given by any other agency which is not approved. The applicants can approach the certifying authorities with original supporting documents and self-attested copies either offline or online.
DSCs are issued with one or two-year validity. However, after expiry, you can renew it by paying a certain prescribed amount of fees for it to the central government. Also, the request for the renewal of the certificate should be made at least 7 days before the expiry of the validity period for the digital certificate
Step 2: Getting DIN ( Director Identification Number)
Director identification number or simply DIN refers to a unique identification number that is given to a person desiring to be a director or an existing director. Through DIN, details of the directors are maintained in a database.It is an 8-digit unique identification number and has lifetime validity.
The DIN concept was introduced for the first time with the insertion of Sections 266A to 266G of the Companies (Amendment) Act, 2006. As such, all the existing and intending Directors have to obtain DIN within the prescribed time frame as notified.
One needs to file an eForm DIN-1 to apply for DIN. The DIN-1 form is available on the Official site of the ministry of corporate affairs. The first step is to register yourself on the MCA Website and have a login id. After filing DIN-1 Form, one should upload the filled form by clicking the eForm upload button on the MCA website and should pay applicable fees. After getting generated DIN one should intimate their company about DIN. The director can intimate their company about DIN by using DIN-2 Form.
Step 3: Name Approval and Incorporation
After getting DSC & DIN, an application for name reservation has to be filed with the relevant Registrar of Companies (ROC). There is a requirement under the Act that the name of a producer company must end with the words “Producer Limited Company”.
After the approval of the name by ROC, documents like MoA and AoA are to be prepared.
The Memorandum of Association ( drafted by incorporating all the objects that the company intends to follow), The Articles of Association (drafted containing all the by-laws of the company.) An affidavit also has to be signed by all the subscribers of the proposed company declaring their legal competency to act as the subscribers.
All the drafted documents should be attached to Form SPICe+ and uploaded to the ROC website. After proper verification, the application will be approved and ROC will issue a Certificate of Incorporation after that the company can start its business operations.
Read More: Difference Between Form 15G and 15H
Conclusion
Producer companies will provide immense help to countries like India which is an agriculture-based economy from which the majority of the population derives their major source of income by engaging in agriculture and allied activity for their livelihood.
A producer company is always a better proposition than an individual farmer or cooperative. It has several advantages. Additionally, it creates a corporate platform and allows members to access several benefits.
