PRODUCER COMPANY COMPLIANCE

WHAT IS PRODUCER COMPANY?

A producer company is a body corporate engaged in any one or all of the following objects that is production, harvesting, grading, pooling, procurement, handling, marketing, selling, and the export of primary produce of the members or import of goods or services for their benefit.

The producer company’s primary object is to deal with the produce of its members and it must also carry on any of the following activities on behalf of its members:

Purifying including preserving, drying, distilling, brewing, venting, canning and packaging of the produce of its Members;
manufacture, sale or supply of machinery, equipment or consumables mostly to its Members;
Providing education on the mutual abetment principles to its members and others;
Provide technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members;
generation, dissemination and distribution of power, reanimation of land and water resources, their use, conservation and communication relatable to primary produce;
Indemnity of producers or their primary produce;
Promoting techniques of familiarity and mutual assistance;
Welfare measures or facilities for the benefit of Members as may be decided by the Board members;
any other activity, accompanying or incidental to any of the activities which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner;
financing of procuring, processing, marketing or other activities which include extending of credit facilities or any other financial services to its Members

BENEFITS OF PRODUCER COMPANIES

Following are the benefits of Producer Company:

The members of a producer company have unlimited liability as the company is has a status separate legal entity. The amount invested in the business would be lost, and the directors' property would be safe.
Producer companies' work is divided among the directors, a single farmer has not to manage their entire business. The entity is governed by the Management Board, which has tenure of five years.
Members of the producer company will be authorized to get bonus shares in the proportion to the shares held by them.

DOCUMENTS REQUIRED FOR PRODUCER COMPANY ANNUAL COMPLIANCE

Memorandum of association of the company
Article of association of the company
Identity proof of directors
PAN cards of the directors
Balance sheet of company
Consolidated Financial Statements
Director’s Report of company
Profit and Loss Account of company
Details of the Members or Producers of the company

MAJOR ANNUAL COMPLIANCE FOR PRODUCER COMPANY

ANNUAL GENERAL MEETING:
The Producer Company should hold Annual General Meeting every financial year. The gap between two AGM should not be more than fifteen Months.
First AGM should be held within 90 days of its incorporation where the members should acquire the articles of Producer Companies and should appoint the Board of Directors.
The producer company should issue the notice to all the directors 14 days prior to the AGM.
1. Agenda of Annual General Meeting
2. Previous Annual General Meeting or Extraordinary General Meeting Minute
3. Names of candidates for election
4. Audited balance-sheet and profit and loss accounts of the Producer Company and its subsidiary along with the Board of Directors Report
5. Drafted resolution for the appointment of auditors
The happenings of every Annual General Meeting should be filed with the Registrar within a period of 60 days of AGM along with the Directors’ Report, the audited Balance Sheet and the Profit and Loss Account. The shareholders should have some absolute rights which are to be process in the Annual General Meeting. These rights include Approval of the budget, Adoption of the annual accounts, Issue of bonus shares, Approval of the patronage bonus, Declaration of the limited return and the decision on the distribution of patronage, Specify the conditions, terms and limits of the loans that may be given by the Board to any of the director; and Approval of any transaction of the nature as is to be reserved in the articles for approval by the Members. In AGM at least 1/4th of the total number of members should be present.
FORM MBP 1:
Every director should in its first board meeting disclose about the interest in any company, firm or other AOI (including any shareholding interest) by filing Form MBP 1through ministry of corporate affairs.

FORM DIR 8:
Every Director of the Company has to file the disclosure of non-disqualification in each Financial Year.

FORM MGT 7:
The Producer Company requires filing Annual Return in Form MGT-7 regarding the latest information about the directors and shareholders of the Producer Company.

FORM AOC 4:
Financial Statements in Form AOC-4 to be filed along with the Balance Sheet, Profit and Loss Account, Directors’ Report, Cash Flow Statement, and Auditor’s Report, and the Consolidated Financial Statement.

FORM ADT 1:
The auditor for the Company should be appointed by the Board of Directors within a period of 30 (thirty) days from the Date of Incorporation of the Company. The appointment application should be filed in ADT-1.

DIR-3 KYC:
All directors are required to file a form to done their KYC with the registrar of companies in form DIR 3 KYC, if you have already submitted the form then one needs to verify the OTP over email and mobile number otherwise all new director needs to submit this form.

FORM DPT 3:
The Return of Deposit should be filed before the Registrar of Companies in FORM DPT-3.

INTERNAL AUDIT:
According to section 581 ZF every Producer Company should have internal audit of its accounts. The same should be conduct in an interval and in a manner as specified by in the articles, by a Chartered Accountant.

GENERAL RESERVES AND OTHER RESERVES:
As per section 581 ZI every Producer Company is required to maintain a general reserve for each year along with the Reserves as mentioned in the Articles. If in case the company does not have sufficient funds in any of the financial year for maintaining the reserves as per the rules of articles, then the contribution to the reserve should be distributed among all the Members in proportion to their contribution in the concerned business of that company in that financial year.

COMPANY SECRETARY:
Every Producer Company that have an average annual turnover exceeding Rs. 5.00 crores in each of the three consecutive financial years should need to appoint a whole time Company Secretary. Penalty for not appointing for both the Company and every officer who is at default should have to give the penalty of Rs. 500/- for everyday during which the said default continues.