This Farmers Agreement on Price Assurance and Farm Services Act, 2020 was passed to fulfil the...
This article is about the incorporation of Producer Companies under Companies Act, 2013. The Producer Company has been defined under section 405 of the Companies Act, 2013. The articles discuss the standpoint over Producer Company Registration and the related legislative and procedural needs. A Producer Company is a legally recognised body of farmers/agriculturist. The company aims to improve its living standards and ensure support to the group and profitability. They are those companies where the activities are related to farming, either grown, produced, or harvested. The producer companies’ aim is to facilitate the formation of corporative business into companies and convert the existing cooperative business into companies.
Section 405 of the Act includes Producer Company’s activities under the Companies Act, 2013 such as; procurement, production, harvesting, grading, pooling, handling, marketing and selling, or export. The following activities in details are as follows:
A Pre-Incorporation of Producer Companies
The steps for pre-incorporation of Producer Companies are as follows:
B. SPICe+ Form has the requirements for the incorporation of Producer Companies
Incorporation of Producer Companies:
1.Name Approval- every producer company must use the word Producer at the end of the company that is “Producer Company Limited”, to validate its status as the Producer Company. The word Private cannot be used in the name and at its end. The absence of the word producer does not indicate it to be a public company.
2. Annual General Meeting- the first AGM shall be conducted within 90 days of its incorporation.
3. Minimum Capital Requirement- the capital required is Rs 5,00,000.
C. Incorporation of Producer Companies
1. Create Login Credentials- the user must create login credentials on the Ministry of Corporate Affairs website.
2. Submit the Application– the User shall mention the company’s type as Producer, further the class of company –as public, private or One Person Company. Define the category of the company- Company limited by shares, limited by guarantee or unlimited company. Define the sub-category of the company-Union Government, State Government, NGO or subsidiary, Holding Company etc. Define division of the activities whether industrial or farming or support activities. Description of the central division of the activities.
3. Details of Proposed or Approved Name- the user must enter the name of the producer company which has been proposed or approved by the user. The user must be cautious of the name that it is not similar to the Section 8 companies or other companies registered. The user must check with the Trademark of the Producer Company.
4. Submission of the Requisite Fees- after the completion of the above details, the user shall submit fees of Rs 1000. The payment is after the Approval of name.
5. Certificate of Incorporation- the registrar of companies on being satisfied shall issue a certificate of incorporation. He will register MOA, AOA and other relevant documents and shall register a certificate of incorporation within 30 days which is conclusive proof of the existence of its formation in Part IX-A.
D. Documents Required for the Incorporation of Producer Company
There is a list of documents required for the Incorporation of Producer Company is as follows:
E. Memorandum of Association and Article of Association
The minimum numbers of Subscribers are 10. The MOA and AOA shall be made in the physical form and no e- MOA and AOA. The MOA and AOA shall be made in INC-33 (MOA) and INC-34 (AOA). The main objects of the company should be similar to the ones mentioned in the SPICe+.
F. Details of- GST, EPFO, ESIC, Bank Account in AGILE PRO to be filled
After submission of form SPIC+, the applicant has to complete the details of AGILE PRO. The form AGILE PRO shall be filled in automatically. It is a web-based form.
G. Fill in the Details of INC-9
The INC-9 is a web-based form and need affixation from the directors or subscribers on the same.
It can be concluded that incorporation of Producer Company has been governed by the Companies Act, 2013. Though Producer companies are the bodies which are legally recognised body for agriculturalist/farmers. The purpose of incorporating producer companies is that members will receive the value for produce pooled and supplied as determined by the Directors. The amount is given in cash/kind and equity shares—the provision of credit facility to members for 6 months. The members given the facility to take the NABARD Loan. The Income Tax exempts the agricultural income under section 10(1). There are multiple benefits and procedural requirements for the producer company registration.
Read our article:Producer Company Registration Procedure in India