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PRODUCER COMPANY REGISTRATION

Producer Company Registration in India: A Detailed Guide

A Producer Company (OPC) is a specialized corporate entity under the Companies Act, 2013, designed to promote agricultural production, harvesting, and marketing, as well as related activities such as dairy, forestry, poultry, and horticulture. It combines the features of a cooperative society and a company, allowing producers to work together to improve their financial position, income levels, and production techniques.

This guide outlines the process, requirements, and benefits of registering a Producer Company in India.

What is a Producer Company?

A Producer Company is a legally recognized entity formed by farmers, producers, or agriculturists who aim to improve the productivity, profitability, and sustainability of their farming activities. It is registered under Companies Act, 2013.

Activities Permitted for a Producer Company

  1. Production and Procurement: Harvesting, manufacturing, and producing goods by its members.
  2. Processing: Preservation, grading, and packaging of agricultural produce.
  3. Marketing and Distribution: Selling and exporting agricultural produce.
  4. Services: Providing technical, consultancy, or financial assistance to members.
  5. Education: Promoting knowledge-sharing and training among members.

Eligibility Criteria for a Producer Company

1. Minimum Members:

  • At least 10 individual producers, or

  • At least 2 producer institutions, or

  • A combination of both.

2. Objects:

  • Must focus on agricultural production, post-harvest processing, or allied activities.

3. Promoters:

  • Only individuals or producer institutions involved in agricultural or production activities can promote a Producer Company.

Benefits of Registering a Producer Company

  1. Separate Legal Entity: The company can own assets and enter into contracts independently of its members.
  2. Limited Liability: Members’ liability is limited to the unpaid share capital.
  3. Tax Benefits:Agricultural income is exempt from tax under certain conditions.
  4. Democratic Management: Each member has equal voting rights, irrespective of their shareholding.
  5. Continuous Existence:The company is not affected by the death or departure of any member.

Documents Required for Producer Company Registration

For Members

  1. PAN Card and Aadhaar Card.

  2. Address Proof (e.g. electricity bill, bank statement).

  3. Passport-sized Photographs.

For the Registered Office

  1. Utility bill (not older than 2 months).

  2. Rental Agreement (if the property is rented).

  3. No Objection Certificate (NOC) from the property owner.

Company Documents

  1. Memorandum of Association (MoA).

  2. Articles of Association (AoA).

Step-by-Step PROCess for Producer Company Registration

1. Obtain Digital Signatures and DIN

  • Acquire a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for all directors.

2. Select a Unique Name

  • Reserve the company’s name using the RUN (Reserve Unique Name) facility. The name must end with “Producer Company Limited.”

3. Draft MoA and AoA

  • Draft the Memorandum of Association (MoA) and Articles of Association (AoA), stating the company’s objectives and operational guidelines.

4. File Incorporation Application

  • Submit the incorporation application via the SPICe+ form to the Ministry of Corporate Affairs (MCA).

5. Verification by Registrar of Companies (ROC)

  • The ROC examines the application and documents for accuracy and compliance.

6. Certificate of Incorporation

  • Once approved, the ROC issues a Certificate of Incorporation, officially recognizing the Producer Company.

Compliance for Producer Companies

1. Board Meetings:

  • Minimum of 4 board meetings annually, with a gap of at least 3 months between each.

2. Annual General Meeting (AGM):

  • Conduct an AGM each year and file minutes with the ROC.

3. Financial Statements and Returns:

  • File financial statements in Form AOC-4 and annual returns in Form MGT-7.

4. Taxation Compliance:

  • Maintain accurate financial records and file income tax returns annually.

5. Audit Requirements:

  • Accounts must be audited annually by a certified Chartered Accountant.

Cost of Registration

  1. Government Fees: Based on authorized capital and state of registration.
  2. Professional Fees: For drafting documents, filings, and legal assistance.
  3. Digital Signature: Charges for obtaining DSC for directors.

Challenges Faced by Producer Companies

  1. Lack of awareness among farmers about the benefits of Producer Companies.

  2. Limited access to professional advisors for smooth registration and compliance.

  3. Difficulty in pooling initial capital for incorporation.

Conclusion

A Producer Company is an excellent vehicle for farmers and producers to collaborate and enhance their agricultural operations. It empowers members by providing a structured platform for better marketing, finance management, and business opportunities.

 

If you’re considering forming a Producer Company, seek professional guidance from us to navigate the legal formalities and ensure compliance with regulatory standards. Let us help you create a thriving and sustainable producer organization!