The hypothesis of a Producer Company was cognizant to allow cooperatives to function as a corporate entity under the Ministry of Corporate Affairs.
A Producer Company offers a statutory and regulatory framework that creates the potential for producer-owned enterprises to compete with other enterprises on a competitive footing.
Here in the trailing article, we will be focusing as to what a Producer Company is, how to incorporate it and what are the necessary documents required for the same.
What is a Producer Company?
A Producer Company is the one that facilitates the formation of co-operative business as companies and to make it possible to convert existing co-operative business into companies.
Objectives of Producer Company
- 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
- Processing including preserving, drying, distilling, brewing, vinting, canning, and packaging of the produce of its Members
- Manufacture, sale or supply of machinery, equipment or consumables mainly to its Members
- Providing education on the mutual assistance principles to its Members and others
- Rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members
- Generation, transmission, and distribution of power, revitalization of land and water resources, their use, conservation and communication relatable to primary produce
- Insurance of producers or their primary produce
- Promoting techniques of mutuality and mutual assistance
- Welfare measures or facilities for the benefit of Members as may be decided by the Board
- 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
- 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.
Pre-requisite of a Producer Company:
- To run a Producer Company it is mandatory that one has a minimum of 5 directors which must possess DIN and DSC.
- Minimum capital required to incorporate a Producer Company is Rs. 5 Lakh.
1. How to incorporate a Producer Company and what documents are needed for the same?
2. To incorporate a producer company the initial step involves obtaining a Digital Signature Certificate (DSC) by all the directors. Documents needed to obtain DSC are:
•PAN Card of the Director
•Aadhaar Card of the Director
Once DSC is received it is essential to acquire the Director Identification Number (DIN) by filing form DIR – 3 along with a self-attested Identity proof, address proof, and a photo.
One must anticipate the name of the Producer Company which is to be finalized. For that, Form INC – 1 to the registrar of companies (ROC) is to be filed by giving 6 names in the order of preference along with the significance of the names. The name shall have the words PRODUCER COMPANY at the end.
When the name is approved by ROC, the following documents are to be prepared:
- The Memorandum of Association is to be drafted by incorporating all the objects that the company intends to follow
- The Articles of Association is to be drafted containing all the by-laws of the company
- A declaration by a professional has to be drafted in the format of form INC – 8
- An affidavit has to be signed by all the subscribers of the proposed company declaring their legal competency to act as the subscribers
- A utility bill and a NOC have to be taken from the owner whose address is to be used as the registered office of the company. If it is not owned, a lease agreement will be attached to the form
- The directors will give their consent to act in the Form DIR – 2 and details in DIR – 8
- All the drafted documents will be attached to Form INC – 7, INC – 22 and DIR – 12 and uploaded to the ROC website – www. Mca.gov.in
On proper verification, the ROC will issue a Certificate of Incorporation and the company can start its business operations.
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