Key Requirements for forming a Producer Company?

Following listed are the key requirement in order to form a producer company:

• Ten or more than Ten individuals
• Two or more than Two institutions

Following listed are the Pre-registration requirements in order to form producer company–

1. Minimum number of five directors and ten members should be there.
2. Minimum paid-up capital of Rs. 5 Lakhs is needed to form a producer company.
3. Company can have endless number of members they want as there is no set prescribed maximum limit of the members.
4. In India, the Producer Company cannot be considered as a public company.
5. The former producer company can only have equity share capital.
6. There must be at-least four boards meeting held every year and the said meetings should not be held less than once in every three months.

What is the objective of the Registration of Producer Company and how this is beneficial to Society at Large? 

• Production, harvesting, procurement, grading, pooling, handling, marketing, selling, the export of primary production of the Members or import of goods or services for their benefit, provided that the Producer Company may require on any of the activities stated in this clause either by itself or through other institution.
• Processing including preserving, drying, distilling, brewing, canning, & 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 & others.
• Rendering technical services, consultancy services, training, research & development & all other activities for the promotion of the interests of its Members.
• Generation, transmission, & distribution of power, revitalization of l&& water resources, their use, conservation & communication relatable to primary production.
• Insurance of producers or their primary produce.
• Promoting techniques of mutuality & 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 above or other activities which may promote the principles of mutuality & mutual assistance amongst the Members in any other manner.   

Procedure for Registration of Producer Company

Following is the procedure for Producer Company Registration:-

• Applicant
  

Any 10 or more producers (Individuals) can join together to form a production company but there is no upper limit on the number of members.

Or, any 2 or more producer institutions can form a producer company.

A minimum capital of ₹ 500,000 is required to incorporate a producer company.

There should be a minimum of 5 directors (maximum of 15) in a producer company.

It can never be converted into a public company however it can be converted into a multi-state co-operative society.

• Obtain Digital Signature

The Subscriber applying for the availability of the name and the proposed Directors need to have DSC.  As per the Ministry of Corporate Affairs, Class-II DSC is required for e-Filings under MCA21.

• Obtain DIN
  

As envisaged under Section 153, an individual intending to become Director needs to obtain DIN. For obtaining DIN e-form DIR-3 has to be filed which has to be certified by a practicing professional.

• Filing of Name Application
  

A Producer Company required to be termed using the following suffix Producer Company Limited suitably representing its position of Producer Company. The word private isn’t used in the name & the absence of which does not indicate that the company is public.

Select a few appropriate names which should indicate as for as possible the main objects of the proposed producer company with Producer Limited Company as the last words of the name of such a company. The application shall be made to the Registrar of Companies (ROC) of the State in which the registered office of the production company is proposed to be situated.

• Drafting of Memorandum and Articles of Associations
  

MOA & AOA drafting is in common a step ensuing to the accessibility of name made by the registrar& it should be noted that the main objects should match with the objects shown in e-Form INC-1 (Objects for Producer Company are restricted).

These two documents are basically the charter and internal rules and regulations of the Company. Thus, it is essential to be drafted with the greatest care & with the guidance of the experts. The Directors/ promoters with the assistance of professional draft MOA & AOA.

• Stamping of Memorandum & Articles of Associations
  

The MOA & AOA of the company must get be printed & stamped by the appropriate authority (Collector of Stamp) in accordance with the requirement of the Indian Stamp Act, 1899 either electronically or physically. And, the Memorandum and Articles of Associations must be signed by the requisite subscribers, i.e. 10 or more individuals, each of them being a producer or 2 or more producer institutions or a combination of ten or more individuals and producer institutions. Each subscriber to the memorandum shall write in his/her own hand, his/her father/husband’s name, occupation, address and the number of shares subscribed for by him/her. The signature of all the subscribers shall also be witnessed. The witness shall also sign and write in his own hand, his name, his father’s name, occupation, and address.

• Registered Office of Company
  

As per section 12(1) and rule 25 of Chapter II- Company shall have a place as its registered office in the State stated in the Memorandum on and from the 15th Day of its Incorporation. (Practically from the date of incorporation).

• Appointment of First Directors
  

The 1stdirectors of the producer company are named in the AOA of the Company who will hold office until directors are appointed within a time period of 90 days of the registering of the producer company.

However, in case of an inter-state appointment co-operative society which has been registered as Producer Company, the first director should be appointed within a period of 365 days of the date of registration as Producer Company Compliances.

The minimum & the maximum number of directors of the producer company should be 5 & 50. Their tenure is for a minimum period of 1 year and the maximum period of 5years.

Filing of Documents and Forms electronically with Registrar of Companies

After obtaining the DSC, the next step is to obtain the Director Identification Number (DIN) by filing form DIR – 3 along with a self-attested Identity proof, address proof, & a photo

Then the name of the production company is to be finalized. For that, Form INC – 1 to the Registrar is to be filed by providing 6 names in the direction of preference along with the significance of the names. The name shall have the words PRODUCER COMPANY at the end.

After the name is approved by the ROC, the following documents are to be prepared:

1. The Memorandum of Association is to be drafted by incorporating all the objects that the company intends to follow
2. The Articles of Association is to be drafted containing all the by-laws of the company
3. A declaration by a professional has to be drafted in the format of form INC – 8
4. An affidavit has to be signed by all the subscribers of the proposed company declaring their legal competency to act as the subscribers
5. A utility bill & a NOC has 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
6. The directors will give their consent to act in the Form DIR – 2 & details in DIR – 8
7. All the drafted documents will be attached to Form INC – 7, INC – 22 & DIR – 12 & uploaded to the ROC website.
8. On proper verification, the ROC will issue a Certificate of Incorporation & the company can start its business operations.
9. POA, if any, executed by any subscriber authorizing a person to sign the Memorandum and Articles on his behalf. If the subscriber is a body corporate, Certified True Copy of resolution of the Board of Directors authorizing a person to sign the Memorandum & Articles on its behalf. POA in favor of person (professional) authorizing to make any correction at the time of registration.

• Certificate of Incorporation of the Producer company
  

Once the registrar fully gratified, that all the necessities of this Act have been obeyed with in respect of registration & matters precedent and incidental thereto, he shall within 30 days of the receipts of documents required for registration, register the memorandum, articles, and other documents, if any, and issue a Certificate of Incorporation under this Act. The Registrar will issue the Certificate of Incorporation bearing a Corporate Identification Number (CIN) consisting of 21 digits within 30 days of the receipt of the documentation required for registration.

• Reimbursement of Promotional Expenses
  

The Producer Company may compensate to its promoters related with the promotion & registration of the Company, all other direct costs, associated with promotion & registration of the company plus registration, legal fees, printing of the MOA & AOA& the payment thereof will be subject to the approval at its1stgeneral meeting of the members. On, registering, the production company will become a Body Corporate as if it is a private limited company. The obligation of its member will be limited by the Memorandum to the value, if any, unpaid on the shares individually held by the members.

• Tasks to be completed immediately after incorporation
  

The ensuing responsibilities have to be finished instantly after incorporation:

• Open a Bank Account with a minimum two officially nominated signatories in the name of the Company.
• Procure PAN number from the Income Tax and TIN number from the Commercial Tax Department to carry out business. Also, the company has to register itself for Service Tax from the Commercial Tax Department and VAT from the Excise department.
• Apply for the commercial connection of Power supply to related agency/board for the office of the PC.
• Establishment of the company office means an arrangement of furniture and fixture along with a visible signage board.