Producer Company


Price : 29,500.00

Ideal for Corporate body engaged in Primary Production


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A Farmer Producer Company (FPO) or Produce Organisation (PO) is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen. A producer organisation can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/benefits among the members. In some forms like producer companies, institutions of primary producers can also become member of PO. Producer companies are basically a corporate body registered under the act which seeks to facilitate farmers to pool their resources and work as a collective team. And a producer company can be formed by 10 individuals (or more) or 2 institutions (or more) or by a combination of both (10 individuals and 2 institutions).

 

Agriculture is the backbone of India. It acts as a primary source of livelihood for about 58% of India’s population. Producer Company primarily deals with agriculture and post-harvest processing activities. It’s mainly has the objective of production, harvesting, procurement, grading, pooling, handling, marketing, selling, and export of primary produce of the members or import of goods or services for their benefit. A Producer Company should have a minimum of 10 members or two producer entities or a combination thereof can form a Producer Company. Thus, the concept of Producer Company Registration is aimed at empowering farmers by creating clusters of farmers organized as a Producer Company.

PAN Card

Self attested PAN Card issued by I.T. Department

Aadhar Card

Self attested Aadhar Card issued by UIDAI

Id Proof

Self attested id proof (Voter ID/DL/Passport)

Address Proof

One month bank statement or telephone bill

Photographs

A latest passport-size colour photographs

Utility Bill

Latest electricity bill with NOC/ Rent Agreement

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Benefits of Producer Company

Government Schemes

There are various schemes launched by the Government of India for the support of FPOs; such as – Equity Grant Fund Scheme (EGFS), Credit Guarantee Fund Scheme (CGFS), National Rural Livelihoods Mission (NLRM).

Owning Property

A producer company being a separate legal entity, can acquire, own, enjoy and alienate, property in its own name. No member can make any claim upon the property of the producer company as long as it is a going concern.

Tax Benefits

Agricultural income is exempted under Section 10(1) of the Income Tax Act, 1961. However, exemption on the agricultural income varies based on the activity carried out by the producers or farmers.

Loans & Investment

The members of the producer companies are initial producers; hence they need finance from time to time for farming. NARBAD Bank is inaugurated by the government to support farmers’ producer companies.

Limited Liability

The members of the producer company or producer organisation have limited liability towards the debts and obligations of the company. Their personal assets remain unaffected in any case of loss or winding up.


Documents required

PAN Card

Self attested PAN Card issued by I.T. Department

Aadhar Card

Self attested Aadhar Card issued by UIDAI

Id Proof

Self attested id proof (Voter ID/DL/Passport)

Address Proof

One month bank statement or telephone bill

Photographs

A latest passport-size colour photographs

Utility Bill

Latest electricity bill with NOC/ Rent Agreement

Frequently Asked Questions

A producer company is basically a body corporate registered as Producer Company under Companies Act, 2013 and shall carry on or relate to any of following activities classified broadly: – (a) Production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, export of *primary produce of the Members or import of goods or services for their benefit. (b) Rendering technical services, consultancy services, training, education, research and development and all other activities for the promotion of the interests of its Members; (c) Generation, transmission and distribution of power, revitalization of land and water resources, their use, conservation and communications relatable to primary produce; (d) Promoting mutual assistance, welfare measures, financial services, insurance of producers or their primary produce.
The formation and regulation of Producer Company is governed under the provisions of Sections 581A to 581ZL of Companies Act, 1956, read with Companies Act, 2013, and the rules made thereunder.
As per section clause (1) of section 581C of the Companies Act, 1956, any one of the following combinations can form a Producer Company: • Any ten or more individuals each of them being a producer. • Or any two or more Producer Institutions. • Or Combination of 10 or more individuals and Producer Institutions.
As per clause (5) of the section 581C of Companies Act, 1956, the Producer Company shall become a body corporate as if it is a Private Company without however any limit to the number of members.
A person being a “producer” or a “producer institution” (whether incorporated or not) can be admitted as member of Producer Company. Here “Producer” means any person engaged in any activity or connected with or relatable to any primary produce and primary produce of farmer is defined as produce of farmer arising from agriculture including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, revegetation, bee raising and farming plantation products), or from any other primary activity or service which promotes the interest of the farmers or consumers or produce of persons engaged in handloom, handicraft and other cottage industries or any product resulting from any of the above activities, including by-products of such products. “Producer Institution” means a producer company or any other institution having only producer or producers or Producer Company or Producer Companies as its member whether incorporated or not having any of the objects referred to in section 581B and which agrees to make use of the services of the Producer Company or Producer Companies as provided in its articles.
The Income Tax Act, 1961, (“the IT Act”) specifically exempts tax on agricultural income under Section 10(1). However, the exemption for such agricultural income shall sometimes vary depending upon the kind of agricultural activity carried on. It is to be noted that though the IT Act does not per-se give any special benefits or exemptions to Producer Companies as such, but depending upon the kind of agricultural activity it carries on, certain tax benefits can be availed.
• Subject to provisions made in articles, every member shall initially receive only such value for the produce or products pooled and supplied as the Board of Producer Company may determine, and the withheld price may be disbursed later in cash or in kind or by allotment of equity shares, in proportion to the produce supplied to the producer company during the financial year to such extent and in such manner and subject to such conditions as may be decided by the Board. • Every member shall, on the share capital contributed, receive only a limited return provided that every such member may be allotted bonus shares in accordance with the provisions of companies’ act. • The surplus if any, remaining after making provision for payment of limited return and reserves referred to in section 581ZI, may be disbursed as patronage bonus, amongst the members, in proportion to their participation in the business of the producer company, either in cash or by way of allotment of equity shares, or both, as may be decided by the members at the general meeting.
The formation and regulation of Producer Company is governed under the provisions of Sections 581A to 581ZL of Companies Act, 1956, read with Companies Act, 2013, and the rules made thereunder.
Every producer company having an average turnover exceeding Rs. 5 Cr in each of 3 financial years shall appoint whole time company secretary.
Every producer company shall have at least five and not more than fifteen directors.

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