Overview of Producer Company Registration

The agricultural industry is the backbone of Indian economy. 60% of India’s population relies on agricultural activities for their livelihood. But these primary producers and farmers struggle a lot to get their share of profit. Keeping their miserable condition in mind, the Government of India has come up with an expert committee, headed by Y.K. Alagh to look into the matter. In 2002, the committee brought the concept of Producer companies in the Indian economy. Since then, they are working with the motive to uplift Indian farmers and agriculturalists (collectively termed “Producers”).

What is the Aim behind Introducing Producer Company?

A legally formed company with the aim to improve the standard of living of farmers and agriculturists can be defined as a ‘Producer Company’. Producer Company is formed under the Companies Act, 2013 and as per the act it can be formed by 10 individuals (or more) or 2 institutions or more or by a combination of both (10 individuals and 2 institutions) having one of the following as their business objective:

• Production
• Harvesting
• Procurement
• Grading
• Pooling
• Handling
• Marketing
• Export
• Selling

India is an agricultural-based country where more than 85% of people are dependent upon farm activities. Most of the farmers in India are small or marginal scale farmers holding less than 2 hectares of land. Low production and poor facilities make their life miserable and make them deprived of the latest technologies. Producer Company aims at empowering all the small and marginal scale farmers so that their economies can be unlocked and they could also opt the latest and new technologies to lead better and improved lives.

To form a Producer company, they have to obtain a Producer Company Registration as per the rules and regulations.

Benefits of a Producer Company Registration

A Producer company enjoys all the benefits of a private limited company such as:

• A separate legal entity

  Just like a private limited company, a registered farmer producer company is also considered as a separate legal entity that can purchase or sell land at its own name.

• More Credibility

  More credibility is offered to the registered companies as compared to the non-registered ones.

• Ease in Management

  An applicant can make desired changes in the board of management by filling some simple form with regards to the registrar of Companies (ROC)

• Limited Liability

  The liabilities of the members are limited, and their personal assets cannot be used to cover up the debt and losses of the company.

Registration Procedure of Producer Company

Just like a Private limited company, Producer Company is also registered as per the rules and regulations of the ministry of corporate affairs. The process is similar and starts with obtaining a Digital Signature Certificate or DSC and Director’s identification number or DIN for all the proposed directors of the company.

The incorporation application is filed in a prescribed format along with the required documents and MOA and AOA. If all goes well and the registrar is satisfied with the documents and application the company would receive the incorporation certificate.

Following are the documents that an applicant would require at each step of the process:

• Obtain a Digital Signature Certificate or DSC

All the directors have to obtain a DSC, and for this, they require below given documents:

1. PAN card of all the directors
2. Aadhar card of all the directors containing the same information as per the PAN card.
3. Passport size photograph of the directors
4. Working Email address and Contact number

• Obtain the Director’s Identification Number

All the designated directors of the company have to obtain their DIN. As per the new rule it can be obtained during the incorporation of the company through SPICe+ form without applying for an extra DIR-3 form.

• Preparation of MOA and AOA along with other documents

Once the name has been approved, the applicant must start the incorporation process by preparing the below-given documents:

• Memorandum of Association or MOA: it is drafted as per the objectives of the company.
• Article of Association or AOA: it is drafted as per by-laws of the proposed company.
• A declaration drafted by a professional
• An affidavit signed by all the proposed subscribers declaring their competency to act as legal subscribers of the company
• A utility bill such as electricity, gas or water bill along with a NOC (No Objection Certificate) from the owner as a residential proof of the corresponding office of the company. In the case of rented property, a lease agreement should be attached to other documents.

• Incorporation Application

Following are the Steps for incorporation of Company through SPICe+ form, which are as follows:-

SPICe+ Login

• At the very first, you need to Login to MCA (Ministry of Corporate Affairs) portal
• After that, please click on MCA services on “SPICe+”
• If you are willing to in case of New company Registration Click on new application
• The user can view application numbers on click of existing application along with approved /proposed name.

Spice+ Part A

• SPICe+ Part A will get enabled after clicking of new application, which contains fields relating to name reservation of the proposed company.
• In order to get it done, the user fills the details of proposed name of the company class, type, sub-category, category, and click on auto check button. It must be noted that auto check performs first level automatic inspection of the proposed name against any discrepancies the name rules.
• Once Part-A is completed, the user can click on: Submit for Name Reservation for the establishment or, Proceed for Incorporation or, Cancel if needed.
• Part-b of the web form will get enabled if the user opted for proceed for incorporation which will showcase different sections.

SPICe+ Part B

• Before going through the SPICe+ Part B, you must note that each section of Part B contains ‘Save & continue button”. You may check form validations which will happen on each and every segment of the section.
• You need to enter the basic detail related to the company to be incorporated i.e. registered or Correspondence Address, Subscribers and directors details, Details related to capital, etc.
• You need to enter the basic details for the issuance of PAN (Permanent Account Number) and TAN (Tax Deduction Account).
• Also, you must make sure to upload mandatory attachments in the web form and confirm on the important declarations & click on the pre-scrutiny & click on submit button once pre-scrutiny is successful.
• Moreover, the user will get a confirmation message one time once web form is submitted successfully in the portal.
• It’s also must be distinguished that you being the user can also download Spice+ Part-B pdf for affixing DSCS from the dashboard.
• Also all the important linked forms get enabled as well as available for the user to fill and submit based on the fields/parameters set by the user in Part-B form.

AGILE –PRO

• The AGILE –PRO web form replaced the old AGILE form (INC-35), where AGILE stands for “Application for Goods and Services identification numbers, employees state insurance corporation registration plus Employees provident fund organization registration. AGILE-PRO needs to be filed as linked with Spice+ in order to get the following requirements, which are as follows:-

  • Registration with ESIC.

  • Registration with GSTIN.

  • Bank account number.

  • Registration with EPFO.

  • Professional Tax Registration.

eMoA and eAoA form

• Electronic Memorandum of Association (eMoA) is known to be the charter of the company can be filed as a linked form to Spice+ in order to get the incorporations.
• Electronic Articles of Association (eAoA) provides all the regulations connected to internal affairs of the company can be filed as a linked form to SPICe+ in order to get the incorporations.

URC-1 INC-9 PDF Generations

• It is mandatory to file “URC-1 form” in case of Part-I companies, holding all the details of existing entity.
• INC-9 declaration form shall be auto populated supported by the details of subscribers and directors entered in Part B. It will be available in dashboard to download and affix DSCs for the user.

Spice + Upload

• User must click on upload forms option After affixing all other linked forms and DSCs in Spice+ Part B pdf,.
• The unique Service Request Number (SRN) will get generated on successful upload of forms which will be displayed to the applicant.
• You must note that the SPICe+ form has to be resubmitted in the similar manner in case where the forms require resubmission for any fault being bannered upon processing.

Overall Attachments required for SPICe+

• Memorandum of Association (MOA).
• Articles of Association (AOA).
• Declaration by the first subscribers and directors (Affidavit not required)
• Proof of office address.
• Copy of utility bills (May vary).
• Copy of COI (certificate of Incorporation) of foreign body corporate (if any).
• Passed Resolution by Promoter Company.
• The concent of 1^st directors in other entities.
• Consent of Nominee in Form INC-3.
• Residential address & Proof of identity of subscribers.
• Residential address & Proof of identity of the nominee.
• Residential address & Proof of identity of applicant I, II, III.
• In case of Chapter XXI (Part 1) Companies, resolution of unregistered companies has to be submitted.
• Declaration in Form (INC-14).
• Declaration in Form no (INC-15).
• Optional attachments if required

Overall Attachments required for AGILE –PRO:

• Documents related to principle place of business.
• Documents related to appointment of Authorised Signatory for GSTIN (either of the documents Letter of Authorization /Managing Committee and acceptance Letter/ Copy of Resolution passed by Board of Directors).
• Documents related to identity of Authorised Signatory for the opening of a bank account.
• Documents related to address of Authorised Signatory for the opening of a bank account.
• Documents related to Specimen Signature of Authorised Signatory for EPFO.

Important Provisions Relating To Producer Company

• The members have unavoidably to be primary producers and can carry only activity prescribed under the Act in India
• The proposed name of the company shall end with the words “Producer Company Limited” only.
• There is NO maximum limit of number of members applicable to these types of Companies
• The producer company will become as if it is a “Private Limited Company” on registration, for the purpose of application of administration and law of the company
• The limit of minimum No. is 10 individual member
• Share capital shall consist of equity shares only of a Producer Company
• There must be a minimum of 5 and not more than 15 directors in the Producer’s company
• Voting rights will be based on a single vote of individuals, for every member.
• A full time chief executive Officer (CEO) should be appointed by the board only.

Tax Exemptions for the Registered Producer Companies

Registered Producer Company enjoys tax benefits such as exemption from agricultural income under section 10(1) of the income tax act, 1961. The exemption varies based on activities carried out by the farmers such as the agricultural income is 100% exempted from the income tax while the income earned from the production of green tea is 60% exempted as per the law.

All these benefits make Producer Company Registration more advantageous for all the farmers in India. This could help them in more production and better credit facilities, thus resulting in more profits for their produce. All in all producer company is bliss for all the farmers in India.