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Producer Company Registration

Nidhi Company is a type of Non-Banking Financial Company (NBFC). It is formed to borrow and lend money to its members. It inculcates the habit of saving among its members and works on the principle of mutual benefit. These companies typically operate in the southern part of the country.

Private Limited Company is the most prevalent and popular type of corporate legal entity in India. Private limited company registration is governed by the Companies Act, 2013 and the Companies Incorporation Rules, 2014.

Producer Company Overview


Producer Company is a company registered under the Companies Act, 2013, which has the objective of production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit. Produce are things that have been produced or grown, especially by farming. Therefore, a Producer Company deals primarily with agriculture and post harvest processing activities.

Over 85% of the Farmers in India are small and marginal farmers with land holdings of less than 2 hectares. This fragmentation in farmers and farm lands, leads to disorganization and it is not viable for Indian farmers to adopt the latest technologies. By organization of these farmers into producer companies, economies of scale can be unlocked and the livelihood of farmers can be improved. Thus the concept of producer company is aimed at empowering farmers by creating clusters of farmers organized as a Producer Company.

The Companies Act defines Producer as any person engaged in any activity connected with or relatable to any primary produce (Produce: “things that have been produced or grown, especially by farming”). A Producer Company is thus a body corporate having an object that is one or all of the following:

production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit. Further, the Producer Company must deal primarily with the produce of its active Members and is allowed to carry on any of the following activities by itself or through other entities – on behalf of the members.

processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members manufacture, sale or supply of machinery, equipment or consumables mainly to its Members providing education on the mutual assistance principles to its Members and others rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members; generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communication relatable to primary produce; insurance of producers or their primary produce; promoting techniques of mutuality and mutual assistance; welfare measures or facilities for the benefit of Members as may be decided by the Board; any other activity, ancillary or incidental to any of the activities which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner; financing of procurement, processing, marketing or other activities which include extending of credit facilities or any other financial services to its Members.

Documents Required For Registration


Foreign National as Partner in LLP


  1. Identity Proof: Copy of Passport

  2. Address Proof:
    • Driving License
    • Residence Card
    • Bank Statement
    • Government issued form of identity containing address.

  3. Residential Proof:
    • Bank Statement
    • Electricity Bill
    • Telephone Bill
    • Mobile Bill

  4. Passport Size Photograph.

Indian National as Partner in LLP


  1. Identity Proof: Copy of PAN Card

  2. Address Proof:
    • Passport/Election Card or Voter Identity Card
    • Ration Card
    • Driving License
    • Electricity Bill/Telephone Bill
    • Aadhaar Card

  3. Residential Proof:
    • Bank Statement
    • Electricity Bill
    • Telephone Bill/Mobile Bill

  4. Passport Size Photograph

Procedure Company Registration Packages

PROFESSIONAL PACKAGE

  1. Company Incorporation Certificate
  2. One Company Name Registration
  3. PAN / TAN
  4. DIN No.
  5. Udyog Aadhaar Certificate
  6. MOA
  7. AOA
  8. Share Certificate
  9. MSME Certificate
  10. GST Certificate
  11. Digital Signature For 2 Year

(No Hidden Charges)
PREMIUM PACKAGE

  1. Company Incorporation Certificate
  2. One Company Name Registration
  3. PAN / TAN, Share Certificate
  4. DIN No., MOA, AOA
  5. Udyog Aadhaar Certificate
  6. MSME Certificate, GST Certificate
  7. Digital Signature For 2 Year
  8. Domain Name
  9. Single Page Website
  10. 1 Year Free Hosting, 1 Buisness Email
  11. Online 1 Year Free GST Software

(No Hidden Charges)


Registration Procedure


The process of registering a Producer Company is similar to that of a Private Limited Company. Digital Signature (DSC) and Director Identification Number (DIN) must be obtained first for the proposed first Directors of the company. Once, Digital Signature (DSC) and Director Identification Number (DIN) are obtained, an application for name reservation is to be filed with the relevant Registrar of Companies (ROC). There is a requirement under the Act that the name of a producer company must end with the words “Producer Limited Company”. Once, the suggested name is approved by the Registrar of Companies (ROC), an application for incorporation is to be filed in the prescribed format for the incorporation of the Producer Company. Once the Registrar is satisfied with the application and the required documents filed for incorporation of Producer Company, he will approve the same and issue Certificate of Incorporation.



Benefits for Producer Companies


The following are the benefits enjoyed by a Producer Company:-

  1. The members of the producer company initially will receive the value for the produce pooled and supplied as determined by the directors. This amount will be given out later in the form of cash/ kind/ equity shares.
  2. The members of the producer company will be entitled to get bonus shares in the same proportion to the shares held by them.
  3. The surplus (after providing provision for payment of limited return and reserves) may be given as patronage bonus* to the members of the producer company.

Loans and Investments


As mentioned above the Producer Company consist of individuals who are primary producers, and thus, are in need of financial support from time to time. Hence, a special provision under the companies acts 1956 was passed for giving loans to producer members. A Producer Company can provide financial assistance to its members through:-

  1. Credit facility : This is available to any member for a period not exceeding six months (such facility must be in connection with the business of the Company).
  2. Loans and advances: These are provided to the producer member against security, repayable within a period not exceeding seven years from the date of disbursement of such loans or advances.
  3. NABARD Loan: NABARD provides support and financial assistance to meet the needs of Producer Companies. In 2011, NABARD set up a Rs. 50 crore Producer Organisation Development Fund (PODF), out of its operating surplus.


Frequently Asked Questions


This isn't required. The entire process is now automated and handled online. You will receive the DIN numbers and Certificate of Incorporation by e-mail from Ministry of Corporate Affairs (MCA).

Expect it to take 35 to 40 days to complete the entire procedure. This will, however, depend on whether you have all your papers in order and the workload of the RoC.

Every company has two parts to its name. The first part is unique. For example, 'WIPRO' or 'MERCEDES-BENZ'. The second part describes the business activity of the company. For example, 'Legal Solutions' or 'Technologies'. This second part must be as descriptive as possible. The name of the company must end with 'Producer Company Limited'.

All companies are legal entities by themselves. Therefore, they have a continuous existence. The only way a producer company can cease to exist (other than shutting it down voluntarily) is if the annual compliances are not met or if the creditors/courts force its closure.

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