"Producer Company" means a body corporate having objects or activities specified in section 378B and registered as Producer Company under this Act or under the Companies Act, 1956. Producer Company is governed by CHAPTER XXIA of Companies Act, 2013
OBJECTS OR ACTIVITIES SPECIFIED IN SECTION 378B
(a) Production, harvesting, procurement, grading, pooling, handling, marketing, selling, the 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;
(b) Processing including preserving, drying, distilling, brewing, venting, canning, and packaging of the produce of its Members;
(c) Manufacture, sale, or supply of machinery, equipment, or consumables mainly to its Members;
(d) Providing education on the mutual assistance principles to its members and others;
(e) Rendering technical services, consultancy services, training, research and development, and all other activities for the promotion of the interests of its Members;
(f) Generation, transmission and distribution of power, revitalization of land and water resources, their use, conservation, and communications relatable to primary produce;
(g) Insurance of producers or their primary produce;
(h) Promoting techniques of mutuality and mutual assistance;
(i) Welfare measures or facilities for the benefit of Members as may be decided by the Board;
(j) 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;
(k) 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.’’
NO OF MEMBERS-(ANY ONE OF FOLLOWING)
- Any Ten or more individuals
- Two or more producer Institutions
- Combination of Ten or more individuals and producer institutions
Note: it will always remain a private limited company without any limit of no of members.
- The share capital of a Producer Company shall consist of equity shares only.
- There is no such requirement of minimum capital as mentioned in the Act, but in general practice, Producer Company is incorporated with a capital of Rs. 500000/-.
- In the case of Individual members single vote for every member irrespective of shareholding.
- In the case of producer institution, Voting right in the first year shall be determined on the basis of shareholding.
- 3. In the case of Individual and Producer Institutions, a Single vote for every member shall be counted.
BOARD OF DIRECTOR
- Every producer Company shall have a minimum of 5 and a maximum of 15 Directors.
- Every producer Company shall have a full-time Chief Executive.
DONATION OR SUBSCRIPTION
Any producer company can make a donation and subscription of a Maximum of 3 % of the net profit to any institution or individual by the way of special resolution for the purposes of—
(a) Promoting the social and economic welfare of Producer Members or producers or the general public, or (b) promoting the mutual assistance principles
LOANS TO MEMBERS AND INVESTMENT
- The credit facility, to any Member, in connection with the business of the Producer Company, for a period not exceeding six months.
- loans and advances, against security specified in articles to any Member, repayable within a period exceeding three months but not exceeding seven years from the date of disbursement of such loan or advances: Provided that any loan or advance to any director or his relative shall be granted only after the approval by the Members in general meeting.
BENEFITS TO MEMBERS.
378E. (1) Subject to the provisions made in articles, every Member shall initially receive only such value for the product or products pooled and supplied as the Board of Producer Company may determine, and the withheld price may be disbursed later in cash or in-kind or by allotment of equity shares, in proportion to the products supplied to the Producer Company during the financial year to such extent and in such manner and subject to such conditions as may be decided by the Board.
(2) Every Member shall, on the share capital contributed, receive only a limited return: Provided that every such Member may be allotted bonus shares in accordance with the provisions contained in section 378ZJ.
(3) The surplus if any, remaining after making provision for payment of limited return and reserves referred to in section 378ZI, may be disbursed as patronage bonus, amongst the Members, in proportion to their participation in the business of the Producer Company, either in cash or by way of allotment of equity shares, or both, as may be decided by the Members at the general meeting
DOCUMENTS REQUIRED FOR THE INCORPORATION OF PRODUCER COMPANY
- PAN of the 10 subscribers and 5 Directors.
- Voter ID/DL/Passport/Aadhar card
- Bank statement of not older than 2 months.
- Proof of farming 7/ 12 extracts of Agricultural Land or certificate from District Tahsildar, this is an additional requirement (proof of farming will differ state to state)
- Electricity bill of the registered office
- Ownership Proof/rent Agreement of the registered office
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