Farmer Producer Company (FPC) Registration
Agriculture is the strength of India's economy, and the country's backbone is the farmers. Small farmers are, however, affected by issues like market access, finance, and infrastructure at the individual level. The idea of the Farmer Producer Company (FPC) was conceived to strengthen farmers and enhance their economic conditions. It enables farmers to group themselves and operate as a corporate entity.
Farmer Producer Company (FPC) is a company registered under the Companies Act, 2013, by farmers for undertaking the activity of production, harvesting, procurement, grading, pooling, handling, marketing, and sale of agricultural produce. The article is a complete guide on Farmer Producer Company Registration, its benefits, process, and compliances.
What is a Farmer Producer Company (FPC)?
Farmer Producer Company (FPC) is a company registered under Section 581B of the Companies Act, 1956 (now governed by the Companies Act, 2013). A Farmer Producer Company is a hybrid organization that is a mix of a cooperative society and a private limited company specifically designed only for farmers and agriculture.
Major Characteristics of FPC:
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It must be prepared by 10 or more independent producers, two or more production businesses, or a blend of the two.
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It is a private limited company with a cooperative spirit.
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It is mostly engaged in farm production, processing, and marketing.
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The earnings thus made are distributed among the farmer members.
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It offers better price realization to the farmers and eliminates middlemen.
Benefits of Farmer Producer Company Registration
Registration of farmer producer company offers many advantages to farmers including:
Legal Identity: An FPC is a legal entity recognized by law and capable of entering into contracts, owning property, and engaging in commercial transactions.
Limited Liability: Members enjoy the advantage of limited liability, which safeguards their assets.
Improved Market Access: FPCs are able to negotiate improved prices and sell directly to buyers, minimizing reliance on middlemen.
Financial Assistance: FPCs are covered under government schemes, subsidies, and bank finance from financial institutions such as NABARD and SFAC.
Tax Relief: FPCs are tax-exempt under Section 10(1) of the Income Tax Act.
Collective Bargaining Power: Farmers can bargain for inputs in groups, reducing expenses and increasing profitability.
Technology and Infrastructure Support: Agro producer company may establish processing units, cold storage, as well as warehouses, which add value as well as storage facilities.
Eligibility Requirements for Farmer Producer Company Registration
To register a Farmer Producer Company, the following have to be adhered to:
At least 10 individual farmers or 2 producer organizations will join.
The basic goal must be agricultural and allied activities.
The business should operate on the cooperative system but in a corporate manner.
The registered office must be in India.
Step-by-Step Registration Process of Farmer Producer Company
Step 1: Obtain a Digital Signature Certificate (DSC)
As online company registration happens, the process starts with acquiring a DSC (Digital Signature Certificate) for every director. DSC is utilized to file electronic documents with the Ministry of Corporate Affairs (MCA).
Step 2: Obtain Director Identification Number (DIN)
Each director has to obtain a Director Identification Number (DIN) by making an application to the MCA.
Step 3: Application for Naming Approval
The proposed name of the FPC must be distinctive and must also abide by the name policy of MCA. It must be preceded by Producer Company Limited and must not be a name or a trademark of an already existing company.
Step 4: Drafting Memorandum of Association (MOA) and Articles of Association (AOA)
AOA and MOA detail the objectives, legislation, and rules of the business. They need to be drafted and submitted along with the registration form.
Step 5: Submission of Incorporation Application (SPICe+ Form)
The incorporation application is to be filed with the Registrar of Companies (ROC) along with the documents that are required:
PAN & Aadhaar of all Directors
Proof of director's address
Registered office address evidence
MOA & AOA
Declaration by directors
Step 6: Certificate of Incorporation
Once the application is approved, the Registrar of Companies (ROC) issues a Certificate of Incorporation, confirming the company’s legal existence.
Step 7: Apply for PAN & TAN
During incorporation, the company must apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for tax purposes.
Step 8: Open a Bank Account
The final step is to open a bank account of the company for monetary transactions.
Compliances of a Farmer Producer Company
Once registered, the company must comply with various legal and regulatory requirements, including:
Annual Filing: Submission of annual returns and financial statements to the ROC.
Income Tax Returns: Submission of income tax returns every year.
Meetings: Conducting Annual General Meetings (AGM) and Board Meetings.
Audit Requirements: The company’s financial records must be audited annually.
Other Compliances: Labour laws, state laws where required, and GST registration.
Government Schemes and Aid to Farmer Producer Companies
The Indian government provides various schemes of financial assistance to FPCs, including:
SFAC Support: The Small Farmers Agribusiness Consortium (SFAC) offers financial assistance and credit guarantee schemes.
NABARD Support: The National Bank for Agriculture and Rural Development (NABARD) provides loans and grants to FPCs.
State Government Incentives: State governments offer grants and subsidies to encourage the setting up of FPCs. PM Kisan Samman Nidhi: Some benefits under this plan are extended to registered FPCs.
Overview
FPC registration is a big step towards empowering the farmers and enhancing their economic condition. Farmers can attain larger markets, capital, and infrastructure by coming together as a group, finally becoming profitable and adopting sustainable agriculture. With the government's help, tax relief, and the freedom to cut out middlemen, FPCs are an agricultural revolution. If you are a farmer who wishes to start an FPC, the correct registration process and adherence to rules will guarantee long-term success. Struggling to register an FPC? Let someone experienced assist you and get it done today! For Online and offline company registration you can connect with the Registration Guru which is one of the best Registration Platform.