According to the Companies Act, 2013, a Producer Company is a company to procure, handle, harvest, sell, pool, produce export or market primary produce and import products and services.
In India, over 85% of small and marginal farmers holding less than 2 hectares of land, leave the sector fragmented and disorganized. Items that have been produced, chiefly by farming are called ‘Produce’. Therefore, in the agricultural sector, a Producer Company deals primarily with pre- and post-harvest activities.
For Indian farmers, it is not feasible to adopt the latest technologies. This fragmentation in farmlands and farms lead to disorganization. Survival of farmers can be enhanced and economies of scale can be tapped by an arrangement of them into producer companies. By organizing Producer Companies and grouping farmers, the scheme of Producer Company focuses on empowering farmers.
A legal entity and or a juristic person recognized under the act, a producer company has the capacity to a wide range of legal privileges which include debts or ability to purchase a property. The directors of a Producer company are protected and have no liability to the creditors of the same.
Producer Company, as a separate legal person remains unaltered by the leaving or demise of its member and remains in existence irrespective of the modifications in the membership. A Producer Company has ‘Perpetual Succession’, meaning its existence will stay uninterrupted and continue until it is legally dissolved.
A Producer Company, being a separate juristic person, can acquire, own and sell property in its name. As long as the company is an ongoing concern, its members cannot make any claims upon the property of a producer company.
The Central Government monitors and registers the Producer companies. In general, a Producer Company earns more credibility than Producer Organizations that are maintained and governed by the State Government.
The proposed Director (s) of the Producer Company will require Director Identification Number (DIN) and Digital Signature Certificate (DSC). Complisure can apply for DIN and DSC. Within 5-7 working days, the proposed directors can acquire DSC and DIN.
Name Approval can be obtained in 3-5 working days. The Application for reservation of name for a Produce Company can be made to MCA once DIN and DSC are accessible for five directors.
In general, MCA will approve the application for amalgamation in 5-7 days, subject to their processing time. On obtaining name approval, registration documents and applications must be submitted.
Directors and Shareholders of the company are required to submit their identity and address proof, to register a Producer Company. In the case of foreign nationals, it is mandated to submit a notarized copy or apostilled copy of their passport. In case of Indian nationals, PAN is compulsory. All the documents must be valid. Residence proof documents such as bank statements or electricity bills must be 2 months old or less.
In India, every company must have a registered office. To prove access to the registered office, a tax receipt or an electricity bill must be submitted. The applicant must also submit a rental agreement or sale deed, a letter from the landlord with his/her permission to utilize the office as a registered office of a company and a recent copy of the water bill.