Producer Company

Advantages

Limited Liability Protection
to Director’s personal assets
Loans under Producer Company
Ideal for producers and farmers
Best option for agricultural activities
Can add multiple members in company

Minimum Requirements

Minimum Five Directors
Minimum Ten Shareholders
Minimum Capital – Rs. 5,00,000
Maximum Fifteen Directors
One Director shall be
Indian resident

Meaning of a Producer Company

A producer company is a legally organised body of mainly farmers and agriculturalists, which was introduced by the government to help raise the standard of living, income and profitability of Indian farmers and agriculturalists. A producer company is formed as a private company itself and is governed under the provision of Companies Act 1956. The company is incorporated with an objective as stated under the law i .e. Production, harvesting or selling as the primary production and related activities. A farmer/agriculturists can incorporate a producer company when they have 10 or more producers and 5 directors with a minimum capital of Rs. 5,00,000/-. Thereafter, there are a few objections stated by the government for producer companies, that can be read under the Section 581B of the Companies Act, 1956.

Provisions for Producer Company

There is no particular provision for Producer Company under Companies Act, 2013, however, chapter IXA of Companies Act, 1956 administers it.

Section 465 of the Companies Act, 2013

According to this section, the Companies Act, 1956 and the Registration of Companies (Sikkim) Act,1961 (hereafter in the section referred to as the repealed enactments) shall not be in force.

Under this section, the provisions of Part IX A of the Companies Act, 1956 are pertinent to a Producer Company in a way as if the Companies Act, 1956 has not been abolished until a particular Act is legislated for Producer Companies (1st clause of Section 465(1) of the Companies Act, 2013).

Let us have a broader look at the step-by-step Incorporation of the Producer Company along with the activities they are allowed to carry and associated provisions.

Activities Allowed to the Producer Companies:

Under Companies Act, 2013, a producer company is allowed to carry on or associate with any of the below-mentioned activities:

Production, processing, harvesting, procurement, pooling, grading, handling, selling, marketing, export of members’ primary produce or import of goods or services for the advantage of members.
Providing training & education, technical & consultancy services, research & development and all other events that promotes Members’ interests
Production, transmission and dispersion of power, restoration of natural reserves of water & land and their utilisation, preservations and communications associated with elementary produce
Promoting mutual assistance, welfare measures, financial services, insurance of producers or their primary produce

Before we move on to the process of incorporation, let us see the requirements that mark our eligibility for it.

Requirements for the Incorporation of Producer Company

Companies Act, 2013 has listed the following requirements for the incorporation of a Producer company

1. Document Required

PAN Card

Self-attested PAN Card of Members and Directors.

Passport Size Photo

2-2 Passport Size Colored Photos of Members and Directors.

Identity Proof of Directors

Self-attested ID proof of Members and Directors- (Anyone out of the following -Valid Passport/Voter ID/Aadhar Card/Valid Driving License)

Address Proof

Self-attested Address Proof of Members and Directors and Should Not be Older than 2 Months (Anyone out of the following – Bank Statement/Electricity Bill/Telephone Bill/Mobile Bill)

Business Address Proof (Owned/Rent/Leased)

NOC from the Owner of Property/Property Papers (Title Deed)/Utility Bill (Either Electricity Bill or Mobile Bill or Telephone Bill) (Should Not be Older than 2 Months)

2. Requirement of Information:

Authorized and Paid-up Share Capital of the Proposed Company and Number of Shares Subscribed by Members.
Explanation: A Company can be started with the minimum capital of Rs. 500000/- and 10 members and shall be treated as a private company.

Place of Birth and Duration of Stay of Members and Directors at Present Residential Address.
Occupation of Members and Directors.
Proposed Object/Business of the Proposed Company.
Educational Qualification of Members and Directors.
Email IDs and Contact Number of Members and Directors.

Process of Registration

The Ministry of Corporate Affairs vide its notification dated 18th February 2020 effective from 23rd February 2020 has further amended the Companies (Incorporation) Rules, 2014 thereby substituting the old Form INC-32 (SPICe) with web service SPICe+ along with certain other amendments.

1. Application for Reservation

The first step is to make an application for reservation of name which shall be reserved by using the web services (SPICe+) available at www.mca.gov.in along with the specified fees. Before Applying for the name, kindly check that the name is available on MCA and confirm that no trademark or such name is there under the Class of work.

The new integrated form consists of two parts i.e. PART A and Part B. The Name(s) of a company can be reserved in Part A of SPICe+. In case the applicant wants to apply for name, incorporation, and other integrated services together, he can do so together by filling necessary information in Part A and Part B.

2. Fill the Part B of SPICe+

The second step is to fill the Part B of SPICe+ for registering the Company. The said form contains various sections that allow you to save and modify information if required.

3. Convert SPICe+ Form into PDF

The third step is to convert the SPICe+ form into a pdf format to affix the DSC.

4. Upload the Form on Ministry of Corporate Affairs

After affixing the DSC, the form is required to upload on the Ministry of Corporate Affairs in accordance with the existing process.

5. Declaration of the Companies Directors and Subscribers

Declaration of all subscribers and first directors of the company which is currentlybeing filed in Form INC-9 will be automatically generated in pdf format and shall be submitted only through Electronic form in all cases, except in case:
a) The no. of subscribers and/or directors is more than 20.
b) Any of the subscribers and/or directors do not have DIN and PAN

Changes as per the Recent Amendments

1. No need to mention SRN

There is no need to mention SRN for names reserved in Part A of SPICE+ as the same will be automatically displayed while filing Part B after filing of Part A.

2. Mandatory Registration for ESIC and EPFO

Registration for ESIC and EPFO has been made mandatory for all new companies that are incorporated w.e.f 23rd February 2020.

3. Professional Registration for Maharashtra

Registration for Profession Tax is made mandatory for all new companiesincorporated in Maharashtra state, with effect from 23rd February 2020.

4. Mandatory Application for opening a bank account

Application for opening of bank account is made mandatory for all newcompanies incorporated with effect from 23rd February 2020 the sameapplication shall be filed through the form AGILE-PRO linked web form.

5. Declaration of Company’s Subscribers and First Directors in PDF form & e-submission

Declaration of all Subscribers and First Directors of the Company which is currently being filed in Form INC-9 will be automatically generated in pdf format and shall be submitted only through Electronic form in all cases, except in case:
• The no. of subscribers and/or directors is more than 20.
• Any of the subscribers and/or directors don’t have DIN and PAN.

6. Mandatory use of e-MoA (INC-33) and e-AoA (INC-34) (in some cases)

It is mandatory to use e-MoA (INC-33) and e-AoA (INC-34) in case the number of subscribers is up to 7 and in the following scenarios:
• Individual subscribers are Indian nationals
• Individual subscribers who are foreign nationals in case they valid DIN and DSC and also submit proof of a valid business visa
• Non-individual subscribers based in India.

7. Signed Physical Copies of the MoA / AoA (in some cases)

Physical copies of the MoA / AoA must be signed and attached if the individuals’ first subscribers are located outside India or if the individual outsourcers do not have a valid business practice or any of the following scenarios: –

S. No.	Cases	Forms to be filed
1.	Non-Individual first subscriber based outside India	SPICe+ (INC-32) with apostille MOA and AOA as attachments
2.	Non-Individual first subscriber based in India	SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34)
3.	Indian National being Subscriber other than Director	SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34)
4.	Indian National being Subscriber-cum-Director	SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34)
5.	Foreign National being Subscriber other than director having valid DIN	SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34) along with Valid Business Visa to be submitted. In case Business Visa is not available, apostille MOA and AOA shall be attached and in such cases, e-MOA (INC33) and eAOA (INC-34) are NOT acceptable.
6.	Foreign National being Subscriber-cum-Director having valid DIN	SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34) along with valid Business Visa to be submitted. In case Business Visa is not available, apostille MOA and AOA shall be attached and in such cases, e-MOA (INC33) and e-AOA (INC-34) are NOT acceptable.
7.	Foreign National being Subscriber-cum-Director not having valid DIN	SPICe+ (INC-32) with apostille MOA and apostille AOA as attachments.

Note: In all the above-mentioned cases, the maximum number of subscribers allowed shall be 7 for filing of SPICe+ form. Wherever the number of subscribers exceeds 7, SPICe+ form shall be filed with MoA and AoA as attachments.

8. Mandatory Filing of Statutory Return

Companies newly incorporated through SPICE+ and who have obtained EPFO/ESI number will have to file Statutory Return only if the prescribed threshold limit has been exceeded.
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