All You Need to Know About Starting a Company
What is Producer Company?
With the Companies Act, 2013, producer companies were introduced in India. Producer company registration provides opportunity to people to form a company where people are mostly involved in production activities mostly related to farming.
To register a producer company, it is required to have 10 or more producers, two or more producer institutions or a combination of 10 or more producers and producer institutions. This type of company can only have equity capital. It requires a minimum of five directors and an authorised capital of Rs. 5 lakhs. The process of registration of producer company is same as registration process of a private limited company.
Types of Producer Companies
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Production Businesses
A business which is involved in production, procurement and manufacturing of any primary produce for sale purpose can register itself as a producer company. -
Marketing Businesses
A business which is involved in either marketing process of primary produce or provide educational services related to production can register itself as a producer company. -
Technical Service Businesses
A business which offers technical assistance to producers in terms of training, educational services and research can register itself as a producer company. -
Financing Businesses
A business which finance the producer activities such as production, marketing and development can register itself as a producer company. -
Infrastructure Businesses
A business which is involved in providing infrastructure facilities to producers such as electricity, water resources, irrigation techniques, land utilisation and consultation can register itself as a producer company.
Documents Required for Producer Company Registration
- Scanned copy of PAN Card or Passport (Foreign Nationals & NRIs)
- Scanned copy of Voter's ID/Passport/Driver's License
- Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
- Scanned passport-sized photograph
- Specimen signature (blank document with signature [directors only])
Documents need to be submitted by all directors and shareholders: -
Note:Any one of the directors must self-attest the first three documents. In case of foreign nationals and NRIs, all the documents must be notarised (if currently in India or a non-Commonwealth country) or apostilled (if in a Commonwealth country).
- Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
- Scanned copy of Notarised Rental Agreement in English
- Scanned copy of No-objection Certificate from property owner
- Scanned copy of Sale Deed/Property Deed in English (in case of owned property)
Documents need to be submitted to the registered office: -
Advantages of a Producer Company
Limits Director's Liability
On growing businesses need to lend money frequently. Proprietor has the personal liability for all this debt in the Sole Proprietorship. So, in case of non-payment of debt by the business, the Proprietor made to pay this debt by selling his personal assets. In a producer company, personal assets of the directors are safe and only the amount invested in starting the business will be lost under any circumstances.
Economies of Scale
Only 15% of India's farmers own the land of over 2 acres. So, we can easily conclude that the majority of farmers cannot utilise the advantages of economies of scale. With a producer company, multiple farmers will be able to work as a unit. It will lower the costs, reduce the risk and hence will get better credit facilities. It will enable them to plan better and to bargain with the buyers.
Better Management
With the help of a producer company, a single farmer does not have to manage the complete business himself. All the work will be divided between its directors. The enterprise will be managed by the Board of Management.
Producer Company Registration Process
- The directors need to apply for the Digital Signature Certificate (DSC) which is required to file the company registration documents. For doing this, you have to provide a few scanned documents and details. Our representatives will fill the form for you online.
- After applying for the DSC, you will be asked to pick a name for your company and send us some scanned documents related to it. SPICe i.e. INC-32, the Memorandum of Association (MoA) and Articles of Association (AoA) will be filed with help of provided documents. If everything is in order, the Certificate of Incorporation will be approved to you.
- A registered Permanent Account Number (PAN) and Tax Account Number (TAN) are required by each company. We will fill out the application online for you. The PAN and TAN will be sent to your registered office address within 21 working days.
