Farmer Producer Company2023-08-21T10:02:29+05:30

Farmer Producer Company Registration

Farmer Producer Company is an organization specifically designed for farmers, agriculturists, milk producers, and person engaged in farming activities with an aim to carry on business on a large scale to fetch better income for their products.

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    What is a Farmer Producer Company?

    Farmer Producer Company (FPC) or Farmer Producer Organisation (FPO) has been designed, considering the needs of farmers, agriculturists, fishermen, weavers, milk producers, and individuals involved in farming activities, collectively referred to as ‘Producers’.

    The main intention of the Farmer Producer Company is to ensure better income for the producers through an organization of their own as the small producers do not have the volume of inputs to get the benefit of agricultural produce on a large scale. Additionally, in agricultural marketing, there is a long chain of intermediaries, through which the producers receive only a small part of the value that the ultimate consumer pays.

    On the other hand, in the Farmer Producer Company, the producers have better bargaining power, bulk buyers of the produce, and bulk suppliers of inputs. Therefore, a Producer Company deals primarily with agriculture and post-harvest processing activities on a larger scale.

    Further, a Farmer Producer Company is a company registered under the Companies Act, 2013, with the aim of producing, harvesting, procuring, grading, pooling, handling, marketing, selling, and exporting the Members’ primary produce, or importing goods or services for their benefit. In this context, “produce” denotes items resulting from farming and allied activities.

    A person being a “producer” or any “producer institution” can be admitted as a member of the Producer Company.

    Features of Farmer Producer Company Registration

    Membership of Producer Company

    • A producer company can be started with a minimum of ten (10) members or two (2) or more Producer institutions or a combination of producers and Producer Institutions thereof, however, there is no maximum limit on the number of members i.e., the producer company can induct unlimited members.
    • The members necessarily need to be primary producers. Here, “Producer” means any person who is engaged in any activity or connected with agriculture and allied activities.
    • The Board of Directors on being satisfied that the said member/producer is no longer a primary producer or a farmer, may direct him/her to transfer their share.
    • An individual with a conflicting business interest cannot join the Producer Company as a Member. Likewise, a Member who obtains a conflicting business interest will lose their membership in the Producer Company and will be expelled as per the articles.


    • Producer Company has to appoint a minimum of 5 Directors and a maximum of 15 Directors to manage its day-to-day affairs.
    • The director shall be appointed for a tenure of a minimum period of. 1 year and a maximum of 5 years, he shall also be eligible to be re-appointed.
    • Producer company also has to appoint a full-time Chief Executive Officer (CEO), who shall be independent apart from members.

    Voting Rights of Members

    • A Producer Company is a hybrid of a Company and a Co-operative Society. It has combined elements of both forms of organization
    • Like a Cooperative society, the Producer company also works on the principle of mutual assistance amongst members.
    • The Share capital of a Producer Company shall consist of equity shares only and cannot be publicly traded.
    • The voting rights of individual members are based on a single vote for every Member.
    • In a case where members of the Producer Company are only Producer institutions, the voting rights of such Producer institutions shall be based on their participation in the business of the Producer Company. However, during the first year of registration of a Producer Company, the voting rights shall be determined based on the shareholding by such Producer institutions.
    • In a case where members in the Producer Company consist of individuals and Producer institutions both, the voting rights shall be computed based on a single vote for every Member.
    • However, the Articles of the company may give the flexibility to alter the voting rights of members.

    Permitted Activities of a Farmer Producer Company

    • production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit by itself or through other institution
    • processing including preserving, drying, distilling, brewing, venting, canning, and packaging of the produce of its members
    • manufacture, sale, or supply of machinery, equipment, or consumables mainly to its members
    • providing education on the mutual assistance principles to its members and others
    • rendering technical services, consultancy services, training, research and development, and all other activities for the promotion of the interests of its members
    • generation, transmission, and distribution of power, revitalization of land and water resources, their use, conservation, and communications relatable to primary produce
    • insurance of producers or their primary produce
    • promoting techniques of mutuality and mutual assistance
    • welfare measures or facilities for the benefit of members as may be decided by the Board
    • any other activity, ancillary or incidental to the above activities or other activities which may promote the principles of mutuality and mutual assistance amongst the members in any other manner
    • financing of procurement, processing, marketing, or other activities specified in the above clauses which include extending credit facilities or any other financial services to its members.

    Distribution of Income to Members

    • Members shall initially receive the value of their produce or products pooled and supplied as determined by the Board.
    • Thereafter, the withheld price may be disbursed later in cash or in kind or by allotment of equity shares, in proportion to the produce supplied to the Producer Company during the financial year as determined by Board.
    • Every Member shall, on the share capital contributed, receive only a limited return.
    • The company can Issue patronage bonuses to the members who have participated actively in the company other than normal dividends usually paid. Patronage bonuses can be either in the form of cash or by way of allotment of equity shares.

    Benefits Of Farmer Producer Company Registration

    • Separate legal entity and Limited Liability

      A Producer Company is a separate legal entity formed through legal procedures. In addition, it is deemed to be a Private Limited Company, in which the liability of members/shareholders is limited. It means that if a company faces loss, then the creditors cannot recover their debts by selling the personal assets of the shareholders.

    • No minimum capital required

      After the Companies Amendment Act 2017, the requirement of minimum capital for a Producer Company was abolished. So now, it can be formed even with minimum capital (Ex. Rs. 10,000)

    • Higher Credibility

      Registered under the Companies Act 2013, an FPC is eligible to carry out business operations in the entire country. It gives the FPC flexibility to expand freely. Further, it must hold an annual general meeting, get its accounts audited, and appoint a full-time CEO. This ensures transparency and credibility of FPC among its members and the general public.

    • Assistance to members

      Producer Companies provide essential support to farmers, right from helping them in raw material procurement to final product delivery. In addition, FPC offers financial assistance (loans and advances), and provides crop insurance and technical education to its members.

    • Preferred by Government, Banks, FI’s, NGOs, etc.

      Governmental organizations, banks, financial institutions, and NGOs prefer FPC as it is a registered entity. In addition, NABARD, Small Farmers Agri-business Consortium (SFAC), and Central and State Govt. bodies also support FPC, through various schemes and programs.

    • Various Tax Exemptions

      As per Section 80PA of the Income Tax Act 1961, FPCs with a turnover up to Rs. 100 crores are not required to pay corporate tax for five years starting from FY 2018-19. This deduction applies to profits from marketing agricultural produce, purchase of agricultural resources, and processing agricultural produce for members.

    Minimum Requirements For FPC Registration

    • Minimum 10 Members or 2 Producer Institutions or Combination thereof

    • Minimum 5 Directors

    • At least 1 Director shall be a permanent resident of India

    • Minimum capital of Rs.10/-

    • DIN & DSC’s for all Directors/Shareholders

    What Is Included In Our Farmer Producer Company Registration package?

    • Company name search and approval

    • Digital Signature Certificate (DSC) for 10 Director/Shareholder

    • Director Identification Number (DIN) for 5 Directors

    • Certificate of Incorporation/Registration

    • Company PAN and TAN

    • Memorandum of Association (MOA) and Articles of Association (AOA)

    • Supporting Document for opening Bank Account

    • Employees State Insurance Corporation Registration (ESIC) and Employees Provident Fund Registration (EPFO)

    • Professional Tax Registration (For Companies registered in the state of Maharashtra and Karnataka only)

    • Company Master File Kit

    Farmer Producer Company Registration Process

    • Application for Name Approval

      You have to provide 2 different names and main objects for the proposed company which shall be submitted to MCA for approval, out of which one name will be approved. In addition, names provided should ideally be unique and suggestive of company business. Further, the name should end with the words “Producer Company Limited”

    • Application for Digital Signature Certificate (DSC)

      Once the name is applied, we shall apply a Digital Signature Certificate (DSC) for all the shareholders and directors to digitally sign the forms. However, If the directors/shareholders already have DSC, then this step can be skipped.

    • Final Submission of SPICE+ forms along with MOA and AOA

      Once the name is approved and the Digital Signature Certificate (DSC) is generated, we must create and submit an incorporation application in SPICE+ forms. This submission should include the Memorandum of Association (MOA), Articles of Association (AOA), and AGILE form for obtaining final approval

    • Get Incorporation Certificate, PAN, TAN, etc.

      It typically takes 3-5 days after final submission to get the incorporation certificate. Incorporation certification is the proof of registration of a company. PAN, TAN, ESIC, EPFO, and Professional Tax registration certificates will also be received simultaneously.

    • Opening of Bank Account

      You can submit the Incorporation certificate, MOA, AOA, PAN, TAN, and other required documents to the bank to open your current account and start the company operations

    Documents Required in Farmer Producer Company Registration

    • List of documents of the Director and Shareholders

      All the proposed directors and shareholders of the company shall submit the following documents. All documents submitted should be valid and readable.

      Scanned copy of-

      • PAN Card or Passport (Foreign Nationals & NRIs)
      • Aadhaar Card/Voters ID/Passport/Driving License
      • Latest Bank Statement/Telephone Bill/Post-paid Mobile Bill/Electricity Bill (The address proof shall be recent and not older than 2 months)
      • Passport-sized photograph
      • Producer / Farmer Certificate by all members
    • Registered Office Proof

      A Private Limited Company should have a registered office place in India. The office address can be residential or commercial premises. The address proof shall be recent and not older than 2 months.  The following documents are acceptable as proof of Registered Office Address.

      Scanned Copy of-

      • Utility bills such as Electricity bills/Mobile Post-paid bills/Landline Post-paid bills/Gas bills/Water bills.
      • No-objection Certificate from the property owner or whose name appears on such utility bill.


    How much time is needed for setting up a Producer company in India?2021-09-02T12:58:12+05:30

    On average it takes 7-12 days for completion of registration, 2 different approvals (Name Approval & Final Approval) are required from government bodies. However, this is dependent on the workload of the Central Registration Centre (CRC), MCA.

    Do I need to be physically present during this process?2021-09-02T12:43:59+05:30

    No, company registration is a completely online process. All the required documents are filed electronically, so you would not need to be physically present at all. You would just need to send us scanned copies of all the required documents & forms.

    Who can be a member of a Producer company?2021-09-02T12:43:35+05:30

    Any individual producer/farmer or a producer institution can become the member/shareholder of a Producer Company. An individual producer/farmer must be 18+ above in terms of age and should possess agricultural land.

    What is the difference between a director and a shareholder?2021-09-02T12:28:11+05:30

    A shareholder or member is an owner of a company who holds certain shares in the company and his name is entered in the register of members of the company. Whereas Director is a person who manages the day-to-day function of a business. Director and shareholder may or may not be the same person in a company.

    Can Producer Company receive contributions?2021-09-02T12:24:59+05:30

    Yes, Producer Company can receive contributions or donations from anyone including non-residents, foreigners, overseas citizens as grants, subsidies, or contributions.

    Can I register Producer Company at my home or residential address?2021-09-02T12:24:10+05:30

    Yes, you can register Producer Company at their residential address. You need to submit the utility bill copy of your home address along with the No Objection Certificate from the owner of the premises.

    Can directors and shareholders be the same person in the Producer Company?2021-09-02T12:21:41+05:30

    Yes, directors and shareholders can be the same person in a company. But if you want to have separation in ownership and management then you can appoint a different individual as shareholder and director. Further, if a director wants to become a shareholder/member he has to be a producer first.

    Is GST mandatory for a Producer Company?2021-09-02T11:46:55+05:30

    GST registration is required for those businesses whose aggregate turnover crosses the prescribed limit or such business that does the inter-state supply of goods/services. So every company has to check whether it supplies goods to different states or qualifies for the prescribed turnover limit or any other conditions as specified under GST laws.

    Whether the appointment of a Chief Executive Officer (CEO) is mandatory?2021-09-02T11:44:06+05:30

    Yes, every Producer Company has to appoint a full-time Chief Executive Officer (CEO) to be appointed by the Board from persons other than Members.

    Is Internal Audit mandatory for Producer Company?2021-09-02T11:43:46+05:30

    Yes, every Producer Company shall have an internal audit of its accounts carried out, at such interval and in such manner as may be specified in articles, by a chartered accountant.

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