Procedure for Producer Company Registration

In India, a Producer Company is a legally certified body of agriculturists or farmers with an objective to improve farmers standard of living & confirm a good status of their available support & profitability. Section 465(1) of the Companies Act provides that the provisions regarding a Producer Company under the Part IXA of the Act, 1956 shall continue to apply. A Producer Company combines the best features of a Cooperative Society & a Private Limited Company, providing collective benefits under a strong & definitive legal framework. Only business entities registered as Private Limited Companies are eligible for the Registration as a Producer Company in India. In India, Institutions & individuals involved in primary production activities can come together & establish a Producer Company in India. In this blog, we are going to discuss the procedure for Producer Company Registration in India

Different Types of Producer Companies in India

Following are the different types of Producer Companies in India:

1. Agricultural Producer Company: This type of Producer Company is set up by agriculturalists, farmers, or producers who are involved in the crop’s cultivation, poultry or dairy farming. The primary objective of an agricultural company is to increase the income of its members & improve their agricultural practices.
2. Sericulture Producer Company: It is set up by various individuals who are involved in the production of silk like silk reelers, weavers, or farmers. The primary objective of this Company is to improve the quality of silk produced, increase its availability & provide better marketing opportunities.
3. Horticultural Producer Company: It is established by individuals who are involved in horticulture like flowers, plants, growing fruits, or vegetables. The primary objective of this type of Company is to improve the quality of its products.
4. Handloom Producer Company: This type of Producer Company is set up by individuals who are involved in handloom weaving/handloom fabric production. The primary objective of a handloom company is to improve their products’ quality.

Checklist for Producer Company Registration in India

Following are some checklist for Producer Company Registration in India:

1. Minimum 10 members are required for Producer Company Registration in India;
2. A minimum capital of Rs. 5 lakhs required;
3. Out of 10 members, at least 5 Directors are required;
4. This Company can be established by the joining of at least 2 Institutions;
5. Producer Company cannot be converted into a Public Limited Company.

Step-by-Step Procedure for Producer Company Registration in India

Following is the step-by-step procedure for Producer Company Registration:

Step 1: Obtain DSC: First, you need to obtain a DSC (Digital Signature Certificate), it is vital for signing the digital incorporation application.

Step 2: Choose a Unique Company Name: Then, you need to choose a unique name for your Company that aligns with the set name availability guidelines. At the time of the Producer Company Registration process, list your chosen names in the SPICe+ Part-A Form.

Step 3: Prepare all Requisite Documents: Once your Company Name is approved, then the next step is to prepare all the vital documents for Company Registration. At this step, MoA, AoA, INC-9, INC-10, DIR-2, etc., are prepared & shared for signature.

Step 4: File for Incorporation: Once all the vital documents are signed by the promoters then the next step is to file the Incorporation Form with SPICe+ INC-32 Form.

Step 5: Follow up and Approval: Once you have filed for the Registration, then the next step is to follow up with the Government. If all your Documents and application are fine then the Government will issue the Registration Certificate.

Post-Incorporation Compliance for Producer Company

Basically, there are 2 important compliance for Producer Company in India and following are 2 Producer Company Compliance:

1. Annual Report by Auditor: NDH-3 is a half-yearly return filed to check whether the Company is working under the prescribed rules or not. This Return is to be filed by 30^th Sep & 31^st Mar each year.
2. Internal Audit: This will be conducted at regular intervals by a CS, CA, Advocate, or CMA as per the AoA.

Conclusion

The procedure for producer company registration embodies the spirit of social welfare and charitable purposes in India. It provides a straightforward and flexible pathway for those with altruistic aspirations. The absence of a minimum capital requirement, coupled with tax benefits, ensures inclusivity and financial viability for nonprofit organizations. The exemption from stamp duty further eases the administrative burden. The distinct legal identity of producer companies accommodates diverse memberships, promoting partnerships and growth. Limited liability safeguards the personal assets of members. Overall, this process not only fosters credibility through mandatory audits but also nurtures a culture of giving and positive social impact, enriching the nation’s nonprofit landscape.