Producer Company Registration Service
The agricultural industry is the backbone of Indian economy. 60% of India’s population relies on agricultural activities for their livelihood. But these primary producers and farmers struggle a lot to get their share of profit. Keeping their miserable condition in mind, the Government of India has come up with an expert committee, headed by Y.K. Alagh to look into the matter. In 2002, the committee brought the concept of Producer companies in the Indian economy. Since then, they are working with the motive to uplift Indian farmers and agriculturalists (collectively termed “Producers”).
Producer Company Registration is done under the Companies Act, 2013 and as per the act it can be formed by 10 individuals (or more) or 2 institutions or more or by a combination of both (10 individuals and 2 institutions).
Producer Company is also recognized as the hybrid of a co-operative society and a registered entity. It excels on the unique elements of a cooperative structure having governing framework similar to that of a company. Such entity primarily refers to a registered corporate served by the group of individuals (mainly farmers) as its members.
The prevailing bylaw permits the Producer Company to accept a deposit in the form of a fixed deposit (aka FD) or a recurring deposit.
Loan against security
Farmer Producer companies are legally permitted to function as lending agencies. They are eligible to lend credit against the FD, gold, Govt securities.
Profit allocation to the members
The profit or income generated by the farmer producer company remains within the organization and is distributed among the serving members.
No taxes on the agricultural income
As such, no taxes are levied on the profit generated by the Producer Company. Presently, these entities are exempted from addressing any tax obligations imposed by the IT department.
Loan Facility to Members
Farmer Producer companies are legally eligible to disburse the credit to the founding members.
Documents required for Producer Company Incorporation
Following are the mandatory documentation for incorporating Farmer producer companies in India;
- PAN & Photo
- PAN & Photographs of the active directors & shareholders
- ID Proof
- Aadhaar card, DL, passport, & voter ID of the Directors, members, and shareholders.
- Address Proof
- Bank Statement, utility bills such as landline bill, mobile bill, and electricity bill
- Producer Proof
- Sarpanch letter/ /Khasra – Khatuni/ Income Tax Return (ITR)with Agriculture Income/ Any other proof a person as a serving member
- Registered Address proof
- Owner’s No objection certificate, utility bill, and Rent agreement
Pre-incorporation legalities for incorporating Farmer Producer Company in India
- At least ten producers: Producers who registered the company. At least 5 and a maximum of 15 directors
- Maximum 200 members: if the proposed entity willing to function as a private limited company
- Note: Inter-state co-operative society functioning as a producer farmer company may have more than 15 Directors for one year from the incorporation date as a producer company.