Producer Company Incorporation through SPICE+

Producer Company– A Producer Company is a form of an organization that consists of producers / farmers / agriculturalists as its members with primary objective of procurement, production, harvesting, etc of agricultural produce. It is basically a combination of a Cooperative Society and a Private Limited Company which instills the essence of Cooperative Society in a Company form of a business for better governance, transparency and smooth functioning.

Definition of Producer Company as per Companies Act, 2013– “Producer Company” means a body corporate having objects or activities specified in section 378B and registered as Producer Company under this Act or under the Companies Act, 1956.

Objects of Producer Company as enumerated under Section 378B–

(a) production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit.

(b) processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members;

(c) manufacture, sale or supply of machinery, equipment or consumables mainly to its Members;

(d) providing education on the mutual assistance principles to its Members and others;

(e) rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members;

(f) generation, transmission and distribution of power, revitalization of land and water resources, their use, conservation and communications relatable to primary produce;

(g) insurance of producers or their primary produce;

(h) promoting techniques of mutuality and mutual assistance;

(i) welfare measures or facilities for the benefit of Members as may be decided by the Board;

(j) any other activity, ancillary or incidental to any of the activities referred to in clauses (a) to (i) or other activities which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner;

(k) financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) which include extending of credit facilities or any other financial services to its Members.

Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section.

Prerequisites of incorporating a Producer Company in India–

1. Minimum 10 individuals who are producers can form a Producer Company.

In case of Producer Institutions, 2 or more such institutions or a combination of ten or more individuals and Producer Institutions can form a Producer Company.

2. It can have minimum 5 and maximum 15 Directors. Usually the First Directors are also the subscribers in the Company.

3. By nature, it shall be a Private Limited Company without any limit to the no. of members for the purpose of this Act. It shall never become or be deemed to become a public limited company under this Act.

4. It shall have one Chief Executive who shall be ex-officio Director and such Director shall not retire by rotation.

5. Share capital of a Producer Company will consist of equity shares only.

INCORPORATION PROCESS–

•  Digital Signature Certificate (DSC)
•  Documents / Information Requirement
•  Name Approval
•  Form filling
•  Issue of Certificate of Incorporation (COI), PAN and TAN

Digital Signature Certificate– DSC of all the 10 subscribers (promoters) is required for incorporation as DSC of all the subscribers / directors are affixed in Form No. INC-9.

Documents/ Information are required for processing DSC application:

1. Copy of PAN

2. Copy of Aadhaar

3. Passport size photograph

4. Email Id & Mobile No.

Documents / Information Requirement

• Documents / Information Required from the Promoters-

1. Latest copy of Utility Bill (Electricity Bill / Telephone Bill / Mobile Bill), which shall not be older than 2 months, where the registered office of the Company is proposed to be incorporated

2. DIN of individuals, if available

3. No. of Shares to be held by each of the Subscribers

4. Company’s Email id & Phone No.

5. Authorized & Paid Up Capital

• If DIN is not available, following additional information will also be required in respect of each of the subscribers and Directors-

1. PAN, Aadhaar of all the Subscribers / Directors

2. Latest copy of Bank Statement (not older than 2 months) of all the Subscriber / Director for address proof

3. Place of Birth

4. Educational Qualification

5. Occupation

6. No. of years of stay at present address

• Following documents shall be prepared / procured on the basis of the above Documents/ Information received-

1. NOC on the basis of utility bill to use the place as registered office of the Company

2. DIR-2 of all the directors

3. Interest of director in other entities

4. Producer Certificates of all the subscribers duly certified by tehsildar/ agriculture officer/ patwari/ SDM/ district administrator and Khasra/ Khatauni

5. Memorandum of Association (MOA) & Articles of Association (AOA)

Name Reservation–

1. One can start the process using ‘SPICe+’ utility on MCA portal, same as incorporating any other Company.

2. Click on ‘New application’ and proceed with filling up SPICe+ Part A.

3. Select ‘Producer Company’ as a Type of Company. Producer Company will always be Private Company limited by Shares.

4. Fill rest of the details and proceed either with ‘Name Reservation’ by making payment of Rs. 1,000/- for the same or proceed directly with ‘Company Incorporation’. If you opt for ‘Name Reservation’, rest of the process of incorporation could be completed only after receiving the approval from the Department. However, if you opt for ‘Company Incorporation’, SPICe+ Part B will open.

Note- Name of Producer Company shall contain ‘Producer Company Limited’ as last words.

Form filing– After the above process, all the details are required to be filled in SPICe+ Part B. Documents as mentioned above shall be attached in this form.

DIN of Maximum 3 Directors can be applied using SPICe+. In case of more than 3 DIN Applications, apply for the same using Form No. DIR-3. Also it is recommended to apply for DIN of all the Directors through e-form DIR-3, before proceeding with the incorporation, in order to reduce the file size of the form, as attaching id and address proof of 10 individuals for the purpose of DIN application will increase the file size.

In case of a Producer Company incorporation, MOA and AOA are required to be drafted physically and signed by all the subscribers manually, which in turn shall be duly certified by a practicing professional as witness. These will be attached in SPICe+ Part B with other attachments. In this case, SPICe MOA & SPICe AOA (online forms) are not filed because the no. of subscribers are more than seven.

Once the SPICe+ Part B is submitted, AGILE-PRO will also be enabled for filling up the details. Here SPICe MOA & SPICe AOA will not be enabled since we have already attached soft copies of MOA & AOA in SPICe+ Part B as Attachment 1 and 2 respectively. INC-9 will be auto-generated on the basis information filled in above forms.

After successfully submitting all the above forms, same will be available for download. DSC can be affixed after downloading the forms. Thereafter, all the forms could be uploaded in following order after logging in on MCA portal-

1. SPICe+ Part B

2. AGILE-PRO

3. INC-9

Issue of Certificate of Incorporation (COI), PAN and TAN– After scrutiny of all the forms and documents, and on being satisfied that all the requirements for registration of Producer Company has been duly complied with, the Registrar will issue Certificate of Incorporation (COI), PAN and TAN within thirty days of receipt of all the documents.

Note that there is no standard format of a ‘Producer Certificate’. The best you can do is, prepare a draft Certificate, citifying the points like:

1. That the Producer Company is proposed to be incorporated

2. That all the promoters / subscribers are Producers

3. That their main source of income is from agricultural produce
and get the same certified from the relevant authority. The concerned authority on verification of the above points will sign the draft and issue the Certificate.

In some cases, authorities have their own format of Certificate which they issue in their local language after due verification. Procurement of Producer Certificate is subjective and depends upon the area where the Company is proposed to be incorporated. The local authority of the area is required to be approached for the procurement of the same.

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Disclaimer: The information provided above is for general informational purposes only in good faith. The content of the above article has been drawn with utmost care and diligence on the basis of applicable provisions and procedures. Efforts have been made to provide accurate, adequate and complete information with no responsibility of the author whatsoever. Users of this information are expected to refer to the relevant provisions of the applicable laws in light with recent amendments / changes.

The author can be contacted at cs.setforward@gmail.com