Introduction
A Producer Company is a corporate body formed and governed under Section 581A to 581ZT of the Companies Act, 1956 (still in force under the Companies Act, 2013) to promote and manage the interests of farmers, agriculturists, or producers. It aims to improve the livelihoods of producers by providing facilities for production, procurement, marketing, sales, and processing of goods and services.
What is a Producer Company?
A Producer Company is defined as:
1. A company formed by a group of producers for the purpose of improving their incomes and ensuring their sustainability.
2. It operates with mutual assistance principles and aims to benefit its producer-members.
Key Features of a Producer Company
Membership:
A minimum of 10 producers or 2 producer institutions can form a Producer Company.
Objects of the Company:
- Production, harvesting, and processing of primary produce.
- Distribution and marketing of agricultural inputs and services.
- Technical consultancy and financial services to members.
Equity Shares:
The company issues equity shares, which can only be held by producer-members.
Limited Liability:
Members have limited liability based on their shareholding.
Compliance Calendar for Producer Companies
Producer Companies have specific compliance obligations under the Companies Act, 2013, and related rules.
Compliance/Form | Description | Due Date | Applicable Section/Rule |
AOC-4 | Filing of audited financial statements with ROC | Within 30 days of AGM | Section 137 of Companies Act, 2013 |
MGT-7 | Filing of annual return | Within 60 days of AGM | Section 92 of Companies Act, 2013 |
DIR-3 KYC | KYC of Directors through their DIN | By 30th September annually | Rule 12A of Companies (Appointment & Qualification of Directors) Rules, 2014 |
DPT-3 | Annual return of deposits (if applicable) | By 30th June annually | Rule 16A of Companies (Acceptance of Deposits) Rules, 2014 |
ADT-1 | Appointment of Auditor | Within 15 days of AGM | Section 139 of Companies Act, 2013 |
Additional Governance Requirements
1-Board Meetings:
- Minimum four board meetings per year.
- Not more than 120 days should elapse between two consecutive board meetings.
2-Annual General Meeting (AGM):
- Must be held every year within 6 months from the end of the financial year but not exceeding 15 months from the previous AGM.
3-Dividend Declaration:
- A Producer Company can declare patronage dividends (profits allocated based on member participation).
Key Points to Note
1-Minimum Capital Requirement
The minimum authorized share capital for a Producer Company is ₹5 lakhs, as per Section 581C of the Companies Act, 1956, which remains applicable under the Companies Act, 2013.
2-Voting Rights
Voting is based on one member, one vote, regardless of the shareholding pattern.
3-Prohibition on Business Activities
A Producer Company cannot act as a public utility company or engage in activities unrelated to the primary produce or members.
4-Membership Types
Individual producers or institutions involved in activities related to the primary produce are eligible for membership.
5-Loan Facilities
Loans can be provided to members for production, marketing, or development purposes with specific tenure and interest guidelines.
Summary
A Producer Company plays a crucial role in uniting farmers, agriculturists, and other producers to leverage shared resources, expertise, and market access. By complying with the statutory obligations under the Companies Act, 2013, these entities ensure transparency, sustainable growth, and profitability for their members.
Conclusion
Producer Companies are pivotal in fostering economic growth and financial independence for producers. By ensuring compliance and governance, they provide a solid foundation for community-driven growth and shared prosperity.