Farmer producer Company - Overview

A Producer Company was introduced in India with the Companies Act, 2013. It gives persons engaged in activities related to producing (what has been grown or produced, particularly by farming) the opportunity to form a company. A farmer producer company can be formed by 10 or more producers (persons involved in, or in activities related to, produce or growth), two or more producer institutions or a combination of 10 or more producers and producer institutions. Such a company can only have equity capital, require a minimum of five directors and an authorised capital of ₹ 5 lakh. The procedure for forming a Farmer Producer company is similar to the one for forming a private limited company.

Types of Farmer Producer Company

Production Businesses

The main functions of producer companies are production, procurement or manufacture of any primary produce for its members (for further sale) and to others.

Marketing Businesses

Even a business involved in the marketing or promotion of primary produce or provision of educational services to members and others can constitute itself as a farmer producer company.

Technical Service Businesses

Any business offering technical assistance to producers, providing training and educational services or conducting research and development can register as a producer company.

Financing Businesses

Any business financing producer activities, be it in the production, marketing or development domain, can register itself as a farmer producer company.

Infrastructure Businesses

Businesses involved in providing infrastructure to producers, whether in the form of electricity, water resources, irrigation techniques, land utilisation, or consultation with regard to the same, may constitute themselves as a producer company.

Documents Required for FPO Registration

TO BE SUBMITTED BY DIRECTORS & SHAREHOLDERS

• Scanned copy of PAN Card or Passport (Foreign Nationals & NRIs)
• Scanned copy of Voter's ID/Passport/Driver's License
• Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
• Passport-size Photograph
• Specimen signature (blank document with signature [directors only])

Note: Any one of the directors must self-attest the first three documents. In the case of foreign nationals and NRIs, all the documents must be notarised (if currently in India or a non-Commonwealth country) or apostilled (if in a Commonwealth country).

FOR THE REGISTERED OFFICE

• Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
• Scanned copy of Notarised Rental Agreement in English
• Scanned copy of No-objection Certificate from property owner
• Scanned copy of sale deed/Property Deed in English (in case of owned property)

Note: Your registered office need not be a commercial space; it can be your residence, too.

FPO Registration Process

A nidhi company registration cannot deal in the following:

5 Business Days

A minimum of five directors must apply for a digital signature registration online, which is necessary to file the producer company registration documents. For this, you will only need to provide a few scanned documents and details; our representatives will fill the form and submit it online.

7 Business Days

As soon as we apply for the DSC, we will prepare the SPICe i.e. INC-32 documents. These documents will take around a week to prepare, and will include the name for your company, the Memorandum of Association (MOA) and Articles of Association (AOA). Once these documents are prepared satisfactorily, they will be submitted to the ROC.

10 TO 15 Business Days

Depending on the workload of the RoC, the documents will be approved in 10 to 15 days. Once approved, the Certificate of Incorporation will be mailed to your registered office address. With this document, you can apply for a Permanent Account Number (PAN) and Tax Account Number (TAN), both of which are necessary for opening a bank account in the name of the business.

Advantages of a FPO Registration

Limited Liability

All businesses can run the risk of not being able to repay their liabilities. It is a necessary evil. In this event, a sole proprietor (or individual producer) would be personally liable for all the debts of the business. The members of a producer company, on the other hand, have unlimited liability as the company is an entity in itself. Therefore, only the amount invested in the business would be lost; the personal property of the directors would be safe.

Economies Of Scale

Only 15% of India's farmers own over two acres of land. The majority of farmers are, therefore, unable to safely unlock the advantages that come with economies of scale. With a farmer producer company, multiple farmers can work as a collective and lower costs, reduce risk and even get access to better credit facilities. This enables better planning and bargaining power with buyers.

Better Management

Rather than a single farmer managing the entire business, work within a producer company can be divided between its directors. The entity is managed by the Board of Management, which has a tenure of five years. Also, a Producer company has a separate legal existence, which means that it isn't affected by the death of any of its members.

Why Vakilsearch?

35 Business Days

Farmer Producer Company Registration takes anywhere around 32-35 business days(subject to government authorisation). Every month we handle 400 requests for registrations, so let us in about your business and we’ll get the process initiated as soon as we can.

9.1 Customer Score

We make your interaction with the government as smooth as is possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.

160 Strong Team

Our team of experienced business advisors are a phone call away, should you have any queries about the process. But we'll try to ensure that your doubts are cleared before they even arise.