Producer Company

Farmer Producer Company – Overview

A Producer Company was introduced in India with the Companies Act, 2013. It gives people 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 and requires a minimum of five directors and an authorized capital of ₹ 5 lakh. The procedure for forming a Farmer Producer company is similar to the one for forming a private limited company.

What is the Farmer Producer Organization (FPO)?

A Farmer Producer Organization (FPO) is a group of farmers who come together to form a company or an organization, with the aim of increasing their bargaining power and improving their economic status. FPOs are typically formed to help small and marginal farmers, and they are regulated by the Indian Companies Act, 2013.

What is the Role of Farmer Producer Organization (FPO)?

• Provide quality production inputs like seed, fertilizer, pesticides, and other inputs at wholesale rates that are reasonably lower
• Make production and post-production machinery and equipment, such as cultivators, tillers, sprinkler sets, combine harvesters, and others, available on a custom hiring basis to members to reduce per-unit production costs
• Offer value-added services such as cleaning, assaying, sorting, grading, packing, and farm-level processing facilities at affordable user charges. Additionally, storage and transportation facilities may be provided
• Engage in higher income-generating activities like seed production, beekeeping, mushroom cultivation, and more
• Aggregate smaller lots of farmer-members produce and add value to make them more marketable
• Provide market information about the produce to facilitate judicious decision-making in production and marketing
• Offer logistics services like storage, transportation, loading/unloading, etc., on a shared cost basis
• Market the aggregated produce with better negotiation strength to buyers and in marketing channels that offer better and more remunerative prices.

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 utilization, 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 the 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 notarized (if currently in India or a non-Commonwealth country) or apostilled (if in a Commonwealth country).

FOR THE REGISTERED OFFICE

• Scanned copy of the Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
• Scanned copy of the Notarized Rental Agreement in English
• Scanned copy of the No-objection Certificate from the property owner
• Scanned copy of sale deed registration/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

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 out 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 of 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 an FPO Registration