Introduction:
The idea behind the Farmer Producer Company (hereinafter called FPC) is that the farmers who are mere the producers of agricultural products can form groups and register themselves under the Companies Act.
PRE-REQUISITES FOR INCORPORATION:
1. As per the Companies Act, 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.
(“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 Act and which agrees to make use of the services of the Producer Company or Producer Companies as provided in its articles)
2. There should be a minimum of 5 and maximum of 15 directors in a producer Company.
(Provided that in the case of an inter-State co-operative society incorporated as a Producer Company, such company may have more than fifteen directors for a period of one year from the date of its incorporation as a Producer Company).
3. No Minimum Share Capital Required for incorporate FPC, and Share Capital consist equity shares only.
4. All the Subscribers should have Digital Signature in spite of the no of the Directors.
If the Registrar is satisfied that all the requirements of this Act have been complied with in respect of registration and matters precedent and incidental thereto, he shall, within thirty days of the receipt of the documents required for registration, register the memorandum, the articles and other documents, if any, and issue a certificate of incorporation under this Act.
5. Following Documents Required to Incorporate FPC:
- PAN & Photographs of the active directors & shareholders
- Aadhar card, Driving License, passport, & voter ID of the Directors, members, and shareholders.
- Bank Statement, utility bills such as landline bill, mobile bill, and electricity bill
- Producer Proof
- 7/12 and 8A (Land Records)
- Farmer Certificate issued by Tehsildar/Talathi of Revenue Department.
- Sarpanch letter/ /Khasra – Khatuni/ Income Tax Return (ITR)with Agriculture Income/ Any other proof a person as a serving member
- No objection certificate from the owner, Utility bill and Rent agreement for Registered Office of the Company.
Object of Producer Company:
As Per Companies Act the Company shall have following Objects:
(1) The objects of the Producer Company shall relate to all or any of the following matters, namely:—
‘‘(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: Provided that the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution;
(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, revitalisation 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.’’
(2) Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section.]
MEMBERSHIP AND VOTING RIGHTS OF MEMBERS OF PRODUCER COMPANY:
| SR. NO. | TYPE OF MEMBERSHIP | RIGHTS |
| 1 | Solely of individual Members | Single vote for every Member |
| 2 | If the Member Consist Producer Institutions Only | First year of registration of a Producer Company, the voting rights shall be determined on the basis of the shareholding by such Producer Institutions.
Next year voting rights of such Producer Institutions shall be determined on the basis of their participation in the business of the Producer Company in the previous year, as may be specified by articles |
| 3 | Combination of Individuals And Producer Institutions | The voting rights shall be computed on the basis of a single vote for every member |
- Benefits to Members:
(1) Subject to the 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.
(2) Every Member shall, on the share capital contributed, receive only a limited return: Provided that every such Member may be allotted bonus shares.
(3) The surplus if any, remaining after making provision for payment of limited return and reserves, may be disbursed as patronage bonus1, 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]
(“Patronage” means the use of services offered by the Producer Company to its Members by participation in its business activities)
(“Patronage bonus”1 means payments made by a Producer Company out of its surplus income to the Members in proportion to their respective patronage)
- Appointment of directors
(1) The Members who sign the memorandum and the articles may designate therein the Board of Directors, not less than five, who shall govern the affairs of the Producer Company until the directors are elected in accordance with the provisions of this section.
(2) The election of directors shall be conducted within a period of ninety days of the registration of the Producer Company:
Provided that in the case of an inter-State co-operative society which has been registered as a Producer Company in which at least five directors [including the directors continuing in office hold office as such on the date of registration of such company, they shall have effect as if for the words “ninety days”, the words “three hundred and sixty-five days” had been substituted.
(3) Every person shall hold office of a director for a period not less than one year but not exceeding five years as may be specified in the articles.
(4) Every director, who retires in accordance with the articles, shall be eligible for re-appointment as a director.
(5) The directors of the Board shall be elected or appointed by the Members in the annual general meeting.
(6) The Board may co-opt one or more expert directors or an additional director not exceeding one-fifth of the total number of directors or appoint any other person as additional director for such period as the Board may deem fit:
Provided that the expert directors shall not have the right to vote in the election of the Chairman but shall be eligible to be elected as Chairman, if so provided by its articles:
Provided further that the maximum period, for which the expert director or the additional director holds office, shall not exceed such period as may be specified in the articles.]
- Meetings of Board and quorum
(1) A meeting of the Board shall be held not less than once in every three months and at least four such meetings shall be held in every year.
(2) Notice of every meeting of the Board of Directors shall be given in writing to every director for the time being in India, and at his usual address in India to every other director.
(3) The Chief Executive shall give notice as aforesaid not less than seven days prior to the date of the meeting of the Board and if he fails to do so, he shall be liable to a penalty of five thousand rupees:
Provided that a meeting of the Board may be called at shorter notice and the reasons thereof shall be recorded in writing by the Board.
(“Chief Executive”, by whatever name called, to be appointed by the Board from amongst persons other than Members and Chief Executive shall be ex officio director of the Board and such director shall not retire by rotation)
(4) The quorum for a meeting of the Board shall be one-third of the total strength of directors, subject to a minimum of three.
(5) Save as provided in the articles, directors including the co-opted director, may be paid such fees and allowances for attendance at the meetings of the Board, as may be decided by the Members in the general meeting.]
- Secretary of Producer Company:
Every Producer Company having an average annual turnover exceeding five crore rupees or such other amount as may be prescribed in each of three consecutive financial years shall have a whole-time secretary.
(No individual shall be appointed as whole-time secretary unless he possesses membership of the Institute of Company Secretaries of India constituted under the Company Secretaries Act, 1980.)
- Annual general meetings:
(1) Every Producer Company shall in each year, hold, in addition to any other meetings, a general meeting, as its annual general meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one annual general meeting of a Producer Company and that of the next:
Provided that the Registrar may, for any special reason, permit extension of the time for holding any annual general meeting (not being the first annual general meeting) by a period not exceeding three months.
(2) A Producer Company shall hold its first annual general meeting within a period of ninety days from the date of its incorporation.
(3) The Members shall adopt the articles of the Producer Company and appoint directors of its Board in the annual general meeting.
(4) The Board of Directors shall, on the requisition made in writing, duly signed and setting out the matters for the consideration, made by one-third of the Members entitled to vote in any general meeting, proceed to call an extraordinary general meeting.
(5) A general meeting of the Producer Company shall be called by giving not less than fourteen days prior notice in writing.
(6) Unless the articles of the Producer Company provide for a larger number, one-fourth of the total number of members of the Producer Company shall be the quorum for its annual general meeting.
(7) The proceedings of every annual general meeting along with the report of the Board of Directors, the audited balance-sheet and the profit and loss account shall be filed with the Registrar within sixty days of the date on which the annual general meeting is held, with an annual return along with the filing fees as applicable under the Act.
(8) In the case where a Producer Company is formed by Producer Institutions, such Institutions shall be represented in the general body through the Chairman or the Chief Executive thereof who shall be competent to act on its behalf:
- E- Forms Filing Requirements
- Financial Statement: E-Form AOC-4 (Company is required to file its Balance Sheet along with Statement of Profit and Loss Account, Cash flow statement, Directors’ Report and Auditors’ Report in this form within 30 days of holding of Annual General Meeting.
- Annual Return: E-Form MGT-7 (Company is required to Filed within 60 days from AGM)
- Auditor Appointment: Auditor will be appointed for 5 (Five) years and form ADT-1 will be filed for 5-year appointment within 15 days of Annual General Meeting.
(Disclaimer: Nothing contained in this document is to be as a legal opinion of the authors whatsoever and the content is to be used strictly for educative purposes only.)
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