A producer company is a company which is formed by the association of any 10 or more individuals or any two or more producer institutions or the combination of both. The objectives of the producer company must be in line with the objects specified in section 581-B.
The Producer Company is the company formed by the association of 10 or more individuals, or the any two or more producer institutions or both of them. The main objective of the producer company registration must be related to production, harvesting, procurement, grading, pooling, handling, marketing, selling, exporting of the primary product of members or import of goods or services for their benefit. Processing includes preserving, drying, distilling, brewing, venting, canning and packaging of the produce of its members. Further, it can manufacture machinery, sale or supply machinery, equipment or consumables mainly to its members.
Following are the requirements of for forming a producer company-
- Producer Company can only have equity share capital.
- The minimum paid-up capital requirement for incorporating the producer company is Rs 5 lakhs.
- Minimum 10 or more individuals or any two or more producer institutions or the combination of both may form the producer company.
- A producer company can have maximum 15 directors
- A producer company cannot be deemed to be a public company under any situation.
- The maximum amount of dividend to be paid by the producer company is determined by its articles of association.
Process of registration of producer company
- In order to start the procedure of incorporating the producer company the proposed directors of the producer company must obtain the digital signature certificate.
- After obtaining the DSC the next step is to acquire the directors identification number by filing the form in DIR-3 along with required documents.
- The applicant is required to make an application for the name reservation in form 1A along with the fees of Rs.1000. Utmost care should be taken while choosing a perfect name for the company as it acts as the identity of the company.
- Further, the memorandum of association and article of the association shall be drafted as per the objectives of the companies.
- The application of incorporation along with the required documents shall be submitted to ROC.
- If the registrar is satisfied with the application for incorporation of Producer Company, then he/she will approve the same and issue Certificate of Incorporation within 30 days of receiving the application.
- The liability of the members of the producer company so formed shall be limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them and be termed a company limited by shares.
- After registration, the producer company will also become the body corporate just like the private limited company but subject to certain conditions. Unlike a Private Limited Company, a Producer Company does not have a limit on the number of members. Further, though the name of a Producer Company ends with the words Producer Limited Company, it shall under no circumstance become or be deemed to become a public limited company.