The Indian economy is one that is strongly based on agriculture. It is estimated that around 60% of the Indian population earns its living from farming and domesticated animals. Although, India has had a long history of struggle since the beginning of its independence.
A group of experts was set up by the Government of India to look into these problems. The group was led by Yasveer K. Agh (an economist) who was responsible for taking a look at this issue. A few years ago, they introduced the concept of a Producer Company into the Indian economy. Thereafter, they have facilitated access for primary producers to inputs, credit, and production technologies, as well as access to markets.
Company Authorized Activities
Producer Companies online are required by law to deal with the produce of their members, and are allowed to engage in any of the following activities:
- Produce of its members needs to be processed (processed also includes preserving, brewing, wine-making, drying, distillation, canning, and packaging) in order to be utilized;
- Providing its producer members with equipment, machinery, or consumables through production, sales, or supply;
- In order to educate the producer’s members of the producer company and anyone else regarding the mutual assistance principles,
- To provide the producer members with the necessary expertise, technical assistance, training, R&D, and all the other services necessary for their promotion;
- The generation, transmission, and distribution of electricity, conservation and communication of primary produce, protection of natural resources including land and water,
- An insurance policy covering the primary producer as well as the primary producer’s property;
- In order to promote the mutuality and mutual assistance techniques, we want to do the following:
- A board may decide that it is in the interest of members to pay attention to their welfare;
- This includes financing of procurement, marketing, processing, or any other activities such as granting credit facilities or providing any other financial assistance to its producer members.
- There are other activities (ancillary or incidental to the main purposes of a producer company) that are being conducted in order to promote mutual assistance amongst the producer members and the lines of mutuality are to be followed.
Registration Process
Fpo farmer producer organizations are registered similarly to Private Limited Companies. It is imperative that the proposed first Directors of the company be given a Director Identification Number (DIN) along with their Digital Signature (DSC). Once the DSC and DIN are obtained, an application for name reservation needs to be filed with the Registrar of Companies (ROC).
According to the Act, each producer company is required to possess a name ending with “Producer Limited Company”. A producer company application is to be filed in the prescribed format for incorporation once the suggested name has been approved by the Registrar of Companies (ROC). Upon approval, the Registrar will issue the certificate of incorporation once he has reviewed the application and required documents.
Documentation Required for Incorporation of a Producer Company
- As a first step, it is necessary to obtain a Digital Signature Certificate (DSC) from each director. A DSC is obtained by submitting the following documents:
- It is the Director’s PAN card that has been issued
- This is a photo of the Director’s Aadhaar card
- Featured photo
- Please include your email address in the message
- Here is the contact information for the company
- Obtaining a Director Identification Number (DIN) is the next step after receiving a DSC. To do so, provide a self-attested ID proof, address proof, and a photo along with DIR -3.
- Afterward, the name of the production company will be finalized. For this, Form INC – 1 should be submitted to the Registrar of Companies (ROC) by giving 6 names in order of preference and their significance. PRODUCER COMPANY shall end the name.
- The following documents must be prepared after the name is approved by the ROC:
- A Memorandum of association is to be drafted by including all the purposes of the company.
- A set of bylaws will be drafted within the company’s articles of association that include all the company’s procedures.
- An official declaration from a professional should be made in the form INC – 8 that you will find on the website of STC.
- In order for all the subscribers to be granted membership rights to the proposed company, an affidavit must be signed by all subscribers declaring their legal competency to act as such subscribers.
- An owner of a company must supply a utility bill and a no-objection certificate to establish the address as the registered office. An agreement of lease will be attached to the form if the property is not owned by the company.
- DIR – 8 – Details of the consent to act of the directors.
Producer companies benefit
A Producer Company enjoys the following benefits as a result of its business operations:
- At first, each member of the producer company will receive a percentage of the value of the produce pooled and supplied based on what the directors have decided. Upon the completion of the project, the sum will be divided between the investors in the form of cash, kind, and equity shares.
- It will be the members of the producer company who will be entitled to receive bonus shares based on the proportion of the shares they already own.
- If a surplus is left over (after provision has been made to pay the limited return and reserve) then it may be given as a patronage bonus* to members of the producer company.