All about Producer Company

Meaning of Producer Company:

‘Producer Company’ means a body corporate having objects or activities specified in section 581B and registered as Producer Company under the Companies Act, 1956.

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

Features of Producer Company

• Name of the company shall end with the words “Producer Company Limited”
• Minimum- 5 Directors Maximum- 15 Directors
• Both the Expert directors or an additional director may be appointed but the same shall not exceed 1/5th of the total number of available directors subject to the AOA (articles of association.) Further, such expert directors will not have the right to vote in the process of election of a chairman but are entitled to be elected as a Chairman.
• The Producer Company will consist of equity share capital only. The shares held by a Member in a Producer Company, shall as far as may be, in proportion to the patronage of that company. Here “patronage” means the use of services offered by the Producer Company to its Members by participation in its business activities.
• First Annual General Meeting shall be conducted within a period of 90 days starting from the date of incorporation.
• Every producer company must have a full time Chief Executive, and the same shall be appointed by the Board among persons other than the members.
• Every Producer Company, that is having an average annual turnover exceeding Rs. 5.00 crores in each of the three consecutive financial years shall need to appoint a whole time Company Secretary
•  The members of the company require being primary producer.
•  There is not any maximum number of members in these companies.
• Every Producer Company shall maintain a general reserve in every financial year, in addition to any reserve maintained by it as may be specified in articles. In a case where the Producer Company does not have sufficient funds in any financial year for transfer to maintain the reserves as may be specified in articles, the contribution to the reserve shall be shared amongst the Members in proportion to their patronage in the business of that company in that year.
• Voting rights in Producer Company is based on a single vote for every member.
• One-fourth of the total membership shall constitute the quorum at a General Meeting
• Every Producer Company shall have internal audit of its accounts carried out in such intervals and in such manner as specified by its articles, by a Chartered Accountant
• A foreign national can be appointed as a director after obtaining valid DIN. However, one director must be a resident in India.

Annual Compliances for Producer Company

1.Form INC-20A

Declaration for the commencement of business required to file within 180 days from the date of incorporation of the Company

2.Appointment of the Auditor (Form ADT-1)

Companies must appoint their First Auditor within 30 days of incorporation. The First Auditor will be appointed for five years and the appointment must be filed using Form ADT-1. When an auditor is appointed by the company then within 15 days from the date of the Annual General Meeting, form ADT-1 is to filed with the registrar of the company.

3.Form AOC-4: 

File & submit its financial Statement to ROC on an annual basis in Form AOC-4. The form is to be submitted within 30 days from the date of conducting Company’s Annual General Meeting.

4. Form MGT-7: 

The company shall file the annual return within 60 days from the date of conducting Company’s Annual General Meeting.

3.Form MSME

Applicability: All companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty-five (45) days from the date of acceptance or the date of deemed acceptance of the goods or services.

4. Form DIR 3 KYC

Applicability: Every individual who has been allotted a Director Identification Number (DIN) as on 31st march of a financial year.

5. Form DPT-3

Applicability: 1) Annual return of Deposits by Companies who have accepted deposits.

2) Annual return particulars of transaction not considered as a deposit or both by every company other than Government company.

6.MBP-1

Every director at:   ‐

First meeting in which he participates as director; or   ‐ First meeting of Board in every FY; or   ‐

Whenever there is change in disclosures  disclosure his interest in form MBP-1

7.DIR-8

Declaration in form DIR-8 that director is not disqualified is required to be given in every financial year

8.Name Board

Every Company shall paint or affix the name and address of the registered office and keep the same painted/affixed, outside every office or place in which its business is carried on, in legible letters.

9.Letter Head of Company

Every Company shall get its name, address of registered office, CIN, telephone, and email printed on all business letters, billheads, letter papers.

10. Notice of AGM

Company will send to the members of the Company approved Financial Statement, Directors’ Report and Auditors’ Report at least 14 clear days before the Annual General Meeting.

The notice calling the annual general meeting shall be accompanied by the following documents, namely : –

(a) the agenda of the annual general meeting ;

(b) the minutes of the previous annual general meeting or the extraordinary general meeting ;

(c) the names of candidates for election, if any, to the office of director including a statement of qualifications in respect of each candidate;

(d) the audited balance-sheet and profit and loss accounts of the Producer Company and its subsidiary, if any etc

11. Board meeting

Board shall meet at least once in every three months and at least four such meetings shall be convened in every year.