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Producer Company Registration and Compliances

Producer Company

Producer Company Formation

A "Producer" means any individual occupied in any goings-on connected with or relevant to any primary produce of its member only. Producer Company is defined as any Body corporate having its main objects of carrying out the operations similar to grading, pooling, handling, marketing, selling off, produce, harvest, procure and export of agriculture produce or import of goods or services for their gain or as particularly mentioned under segment of Companies Act 1956.

Objectives which producer company may perform

The objectives or the activities to be carried on by the producer company are already defined under Section 581B of Companies Act 1956. Each producer company aim to deal first and foremost with the produce of its concerned members for carrying out any of its objects specified in this section.

  • To carry on the operations of manufacturing, reaping, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the members or import of goods or services for their benefit. It may also carry on any of the activities particular in this clause either through itself or with the aid of any other institution.
  • To deal with processing including brewing, venting, canning, preserving, drying, distilling and packaging of produce of the members of the company.
  • To carry on the business of manufacturing, sale or supply of machinery, equipment or consumables mainly to its members.
  • To make available educational assistance on the mutual assistance principles to its members and others.
  • By providing technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its members.
  • To get the insurance done of producers or their agriculture produce.
  • To promote new techniques of mutuality and mutual assistance.
  • To provide welfare measures or facilities for the benefit of members as may be decided by the Board.
  • To generate, transmit and supply of power, renewal of land and water resources, conservation and communications related to primary produce.
  • Any other activity, ancillary or incidental to any of the activities referred to in above points or other activities which may promote the main beliefs of support and mutual aid between the members.
  • Providing finance for procurement, processing, marketing or any other miscellaneous activities as particularly mentioned above which comprise of extending of credit facilities or any other monetary services.

Formation

Any ten or more individuals who are occupied in any goings-on connected with or relevant to the agricultural produce or more than two producer institutions, or a permutation of 10 or more than ten persons and producer institutions can structure a Producer Company. The producer company shall be a body corporate just as though it is a private limited company and the producer company shall not turn out to be or be deemed to be converted into a public limited company. Any personnel shall not become a member who has any business interest which is in conflict with the business of Producer Company. And if any Member who occupied himself in any business interest which is in clashes with the business of the Producer Company that member shall cease to be a member of that Company.

Can an inter-state co-operative society apply to become producer companies?

Yes any inter-State co-operative society with objects not restricted to one State may make an application to the Registrar for registration as a category of Producer Company when engaged in the agriculture business as specified above.

Number of directors

Every Producer Company shall have at least five directors and shall not have more than fifteen directors. After registration of producer companies the directors are to be appointed within 90 days.

Meetings

Chairman of the company shall conduct the board meeting once in every 3 months and at least 4 or more board meetings shall be conducted in each year. Producer companies are required to hold at least one general meeting every year as its annual general meeting. The legroom between the two annual general meetings shall not surpass 15 months time period. For each and every producer company it is obligatory to conduct its former annual general meeting within time period of ninety days from the date of its formation. However the registrar may permit the extension of time to 3 months but not for First annual general meeting.

Notice

The notice for any type of board meeting shall be sent by the chief executive as a minimum seven days notice preceding to the date of the board meeting. On the other hand conference of the Board may be summoned at shorter notice and the grounds thereof shall be recorded in writing by the Board. The notice of any type of general meeting of the producer company shall be summoned by giving not less than fourteen days prior notice in writing before the date of meeting.

Mandatory appointment of chief executive

Full time chief executive officer or any name to be called by, is the mandatory requirement for every producer company to be selected by the board from amongst persons other than Members. The Chief Executive is the person who shall manage the affairs of the producer company under the general superintendence, direction and control of the Board of directors. The position of Chief Executive shall be an ex officio director of the board and he is not liable to retire by rotation is hereby held responsible for the company’s performance

Loan to members

The Board of director may provide monetary support to the Members of the Producer Company by passing a board Resolution in the following way:

(a) A credit facility may be provided to any member of the company in connection with the business of the producer company but the period of credit shall not surpass 6 months.

(b) Any loans and advances in opposition to security mentioned in the articles may be provided to any of the member which shall be repayable within a period exceeding three months but not exceeding seven years from the date of availing of such loan or advances. On condition that any loan or advances to any director or his relatives shall be accepted only after passing a special resolution taking the consent of the members in general meeting.

Annual return

Every producer company is required to file its annual return and financial statements to registrar of companies in the Form AOC-4 and From MGT-7 within sixty days from the date of its annual general meeting as a obligatory compliance to save the company from heavy penalties.

Audit

For every Producer Company it is obligatory to get its internal audit of its accounts which is to be carried out by Chartered Accountants.

The Neusource Startup Mind is the finest business startup consultant that offer various services of registration like Proprietorship Firm Registration, Partnership Firm Registration, LLP Registration, Company registration, GST Registration, Copyright Registration, ISO Registration Trademark registration, and other FSSAI License, etc. 

21 Mar

NeuSource Startup
Akash Rai

"Any time is a good time to start a company.” Neusource indulge in providing business consultancy services which help startups to accomplish their desired results as a TAJ EXPRESS. If you’re passionate about something and you work hard, then neusource is the right choice for you.