You are currently viewing Post Incorporation Compliance for Producer Companies

Post Incorporation Compliance for Producer Companies

Loading

Last Updated on April 21, 2023 by Kanakkupillai

What is a Producer Company?

The meaning of Producer Company can be understood as a body corporate that is registered as a Producer Company under the relevant act which is the Companies Act, 2013. The company should be carrying on or relating to any of the below-mentioned activities:

(a) The processes like production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, and export of primary produce of the Members or import of goods or services for their benefit;

(b) Providing the required technical services, consultancy services, training, education, research and development, and all other activities for the promotion of the interests of the members coming under it;

(c) Generating, transmitting, and distributing power, and also the revitalization of land and water resources, their use, conservation, and communications relatable to primary produce;

(d) Promoting mutual assistance, welfare measures, financial services, and providing insurance to the producers or such producers’ primary produce.

Key Takeaways

  • The meaning Producer Company can be understood as a body corporate that is registered as a Producer Company under the relevant act which is the Companies Act, 2013.
  • A current account should be opened by the company in its name with the details of its registered place or office of business and the subscribers of the company should then contribute the such prescribed amount to the account.
  • The company should provide the subscribers of the Memorandum of Association (MOA) with a share certificate within 2 months from the date of incorporation of the company.
  • The name and details of the subscribers should be documented in the Register of Members with the date of incorporation of the company as the date on which the subscribers are deemed to be members of the provided company.

Producer Company Registration Process

For registering a producer company, the following members are required:
– 10 or more individuals each of whom are producer, or
– 2 or more producer institutions, or
– A combination that is made of 10 or more individuals and also the producer institutions.

1) First, the proposed directors should obtain a digital signature for the proposed directors, as the same is required for registering the company with the MCA. After which they should also obtain DIN or Director Identification Number.

2) Once these steps are done the company should give name approval, which should be filed with MCA with the words, ‘Producer Limited Company’ should be filed in the prescribed form and after receiving the approval of the name an application for incorporation should also be given.

3) If the registrar is satisfied with the details furnished in the application, then the same shall be approved and a certificate for the commencement of operations shall be given. The functioning will be similar to that of a private limited company, but it is to be noted that a producer company does not have any limit with respect to the number of members like a private limited company.

4) The production company will pay the surplus earned by the company would be given as a patronage bonus to the members of the producer company. They may also be given shares in the same ratio in which the shares are held by them.

Post Incorporation Compliance for Producer Company

  • In accordance with Section 184 (1), each Director of the Company shall reveal his interest in any other entity at the first Board meeting of each fiscal year.
  • Every director is required to submit Form DIR 8 to the business in every financial disclosure of non-disqualification as per Section 164 (2) read with 143 (3g).
  • Each business must submit a yearly return to MFT 7 within 60 days of its annual general meeting.
  • Within 30 days of the annual general meeting, Form AOC 4 companies are obliged to submit a financial statement, cash flow statement, and profit and loss account.
  • Every year, before June 30th, DPT 3 companies must file documents about the return of deposits or information that is not deemed to be a deposit.
  • In regards to pending payments of MSME vendors to the company registrar, MSME 1 form companies are required to submit this return within 30 days of the end of the half-yearly period.
  • Every director must submit Form DIR-3 KYC by September 30th of each year.
  • The director’s report needs to be prepared.
  • The general meeting notice must be distributed by the business at least 14 days before the meeting.
  • The board must conduct 4 meetings a year, and it must meet every three months.

Requirement of Producer Company for Annual Filing

1) Maintaining a Registered Office

The Producer Company should maintain a registered office, once the company is registered. The name of such registered office shall be filed by the company with MCA or the Ministry of Corporate Affairs. This can be in a corporate building or residential complex on a rental basis or ownership basis.

2) Conducting Board Meetings

Within 30 days of incorporation, the company should hold a Board Meeting, in which the discussion regarding the following elements should be made:
– The approval for opening a current account,
– Appointing First Statutory Auditor,
– Authorizing Statutory Registrations.

3) Letter Heads

The company should get the letterhead ready as soon as possible as it is required for taking PAN or taking bank account or such other compliances. And it should contain the name of the company along with the address of its registered office, CIN (Company Identification Number), phone number along with the e-mail ID and website address or such other details as may be required.

4) Board to be Kept Outside the Office

Outside the registered office and another place of business of the company, a board with the name, and details of the registered office should be kept outside the office. This will help people find details of the company with regard to the place of business.

5) GST Registration and IEC Code Availing

The company should then take a GST registration or IEC (Import Export Code) which is required by businesses for major functions and business transactions or proceedings.

6) Bank Account

A current account should be opened by the company in its name with the details of its registered place or office of business and the subscribers of the company should then contribute the such prescribed amount to the account.

7) Issuing Share Certificates

The company should provide the subscribers of the Memorandum of Association (MOA) with a share certificate within 2 months from the date of incorporation of the company. The share certificates should be issued only after receiving the money from the shareholders through a proper banking channel.

8) Maintaining Statutory Registers and Minute Books

Companies Act 2013 stipulates that the company should maintain certain books on a mandatory basis and this would include statutory books, registers, and minute books as well. And if the company fails to comply with the same, fines shall be charged as per the penal provisions of the Companies Act.

9) Register of Members

The name and details of the subscribers should be documented in the Register of Members with the date of incorporation of the company as the date on which the subscribers are deemed to be members of the provided company.

Penalties for Non-Compliance

  • The MCA may revoke any license that the Central Government has given to a company if it is found that the company is not operating properly or is in violation of any of the regulations on which the license was based.
  • Companies that violate the law may be penalized up to $1,000,000, but no less than $10,000.
  • Any business official who is at fault for the producer company’s noncompliance is subject to a fine that can reach $25,000 or imprisonment.

Why Kanakkupillai for Annual Filing of Producer Company?

Each producer business is required to make sure that they completely adhere to the rules established by the Ministry of Corporate Affairs. The annual compliances and other requirements must be followed to increase the company’s business transparency and trustworthiness as well as to avoid paying out hefty fines and other penalties. Keeping track of all annual compliances, though, can be a difficult and taxing task.

The expert team at Kanakkupillai has a track record of success in assisting numerous producer companies to achieve MCA compliance. Kanakkupillai will assist your business with all aspects of compliance, from document preparation to timely submission of the required paperwork to the MCA to escape hefty fines and penalties.

Kanakkupillai

Kanakkupillai is your reliable partner for every step of your business journey in India. We offer reasonable and expert assistance to ensure legal compliance, covering business registration, tax compliance, accounting and bookkeeping, and intellectual property protection. Let us help you navigate the complex legal and regulatory requirements so you can focus on growing your business. Contact us today to learn more.