Overview of Producer Company Registration in Bengaluru

A producer company is a legally recognised group of farmers/agriculturists with the goal of improving their standard of living and ensuring the sustainability of their available assistance, revenue and profitability.

Section 465(1) of the Companies Act, 2013 states that the provisions relating to a Producer Company under the Companies Act, 1956 would continue to apply. As a result, under the Act, a Producer Company can be founded by 10 persons (or more) or 2 institutions (or more) or by a combination of both (10 individuals and 2 institutions) with the defined business aim.

What are the Benefits of Registering a Farmer Producer Company in Bengaluru?

There are many benefits of establishing a farmer producer company in Bengaluru, which includes:

• Deposit Acceptance

One of the key advantages of the Farmer Producer Company is its ability to accept deposits, including fixed deposits and recurring deposits, from its members.

• Profit Allocation to Members

The generated profit or income within the Farmer Producer Company is retained within the organisation and distributed among its members, mainly farmers, according to their participation.

• Tax Exemption on Agricultural Income

The Farmer Producer Company enjoys tax exemption on the profit it generates. It is currently exempted from any tax obligations imposed by the IT department on agricultural income.

• Loan Facility to Members

In addition to accepting deposits, the Farmer Producer Company can also provide loan facilities to its founding members.

What are the Activities that Producer Companies in Bengaluru are Authorised to do?

A Producer Company in Bengaluru is empowered to engage in the following activities, all of which revolve around benefiting its members and promoting mutual assistance. They are:

• Processing: This includes various processes like preserving, brewing, vinting, drying, distilling, canning and packaging the produce of its members.
• Equipment and Machinery: The company can manufacture, sell or supply equipment, machinery or consumables to its producer members.
• Education and Consultancy: Providing education on mutual assistance principles to its members and offering consultancy services, technical assistance, training and research and development activities to promote their interests.
• Power and Communication: The generation, transmission and distribution of power, conservation and communication related to primary produce, along with renewal of land and water resources.
• Insurance: The company can offer insurance services for the primary produce and its producers.
• Promoting Mutuality: The company's objective includes promoting the techniques of mutuality and mutual assistance among its members.
• Welfare Activities: Undertaking welfare activities for its members as decided by the Board.
• Financing Support: Providing financial assistance for procurement, marketing, processing and extending credit facilities to its producer members.

What are the Basic Eligibility Criteria for Farmer Producer Organisations/Companies in Bengaluru?

To incorporate a Farmer Producer Organisation (FPO) in Bengaluru in accordance with the Companies Act, 1956, the following conditions must be met:

1. Composition of Members: A Producer Company can be formed by any of the following combinations:

• Ten or more individuals, each of them being a producer.
• Two or more Producer Institutions.
• A combination of ten or more individuals and Producer Institutions.

2. Number of Directors: The FPO should have a minimum of 5 and a maximum of 15 directors.

3. Minimum Capital Requirement: A minimum capital of Rs. 5,00,000 is necessary for the incorporation of a producer company. However, it is advisable to establish the FPO with an authorised capital of Rs. 15 lakhs, as this qualifies for the government scheme of nil stamp duty.

4. Digital Signature Requirement: All the subscribers, regardless of the number of directors, must possess a digital signature. This is mandatory during the incorporation process of the FPO.

Mandatory Documents for Farmer Producer Company Registration in Bengaluru

To successfully incorporate a Farmer Producer Company in Bengaluru, the following essential documents are required:

• PAN & Photographs: PAN (Permanent Account Number) and photographs of all active directors and shareholders are mandatory for the incorporation process.
• ID Proof: The ID proof documentation should include Aadhar card, Driving License, passport and voter ID of all Directors, members and shareholders involved in the company.
• Address Proof: Address proof documents must consist of bank statements and utility bills, such as landline, mobile and electricity bills, for verification purposes.
• Producer Proof: Proof of being a producer, which may include a Sarpanch letter, Khasra-Khatauni documents, Income Tax Return (ITR) indicating agricultural income or any other relevant evidence.
• Registered Address Proof: For the registered address of the company, the necessary documents comprise a no-objection certificate from the owner, along with utility bills and a rent agreement if applicable.

What is the Procedure for Registering a Producer Company in Bengaluru?

The detailed process for registration of farmer producer company/farmer producer organisation in Bengaluru is as follows:

Step 1: Apply and Obtain the DIN and DSC

• Apply for the Digital Signature Certificate (DSC) to enable electronic or digital signatures.
• Simultaneously, apply for the Director Identification Number (DIN) for all directors.
• These applications, along with the SPICe form, must be submitted.

Step 2: Name Approval

• Initiate the process of name approval for the producer company.
• Apply for name approval through the MCA (Ministry of Corporate Affairs).
• Use the RUN process (Reserve Unique Name) for this purpose.
• The ROC for Bengaluru and MCA will check for name availability.
• Upon approval, the applicant must proceed to secure the Certificate of Incorporation within 20 days of the application.

Step 3: Drafting the Memorandum of Association and Articles of Association

• After submitting the documents with the SPICe Form, proceed to draft the Memorandum of Association (MoA) and Articles of Association (AoA).
• Members of the company must sign an affidavit indicating their purpose and commitment.

Step 4: Incorporation Certificate

• In the final step, the company receives the Certificate of Incorporation.
• The process usually takes around 10 days for completion.

What are the Services Offered by Startupfino for Producer Company Registration and Compliances in Bengaluru?

Starting a producer company in Bengaluru will provide several benefits to any farmer or producer who has some sort of produce related to agriculture products. A producing company would profit from market inputs, digitalisation and technology. It is simple to establish a producing firm.

Startupfino is a company that specialises in offering complete services for Producer Company Registration and Compliances in Bengaluru. We can aid with everything from providing advice in the beginning phase to ensuring that you meet all the necessary requirements and also keeping your Company in good legal standing.

Our services include the below mentioned:

• Comprehensive assistance in obtaining Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for all members.
• Expert guidance for name approval process through the Ministry of Corporate Affairs (MCA) and Registrar of Companies (ROC) in Bengaluru.
• Efficient drafting of Memorandum of Association (MoA) and Articles of Association (AoA) in compliance with regulations in Bengaluru.
• Streamlined incorporation process to secure the Certificate of Incorporation within the stipulated time frame.
• Expertise in simplifying the legal procedures and documentation to ensure a hassle-free registration experience for the farmer producer company in Bengaluru.
• Providing guidance on tax exemption for agricultural income under the Income Tax Act, thus ensuring compliance and benefits for the producer company.
• Facilitating the provision of loan facilities to founding members and helping with credit facilities aligned with the business aims.
• Guiding producer companies on accessing various government support schemes, subsidies and technical assistance to promote their growth and development.

By availing our services, entrepreneurs can avoid the negative outcomes of non-followance of rules and compliances. StartupFino works hard to provide services that are prompt and effective, so you can manage your business in Bengaluru without any issues and without facing penalties or problems.