Producer Company Incorporation (FPO Registration) – An Overview
A Producer Company, also known as a Farmer Producer Organization (FPO), is a special type of business entity registered under the Companies Act, 2013, designed to empower farmers, agriculturists, and producers.
It enables them to collectively undertake production, procurement, grading, pooling, handling, marketing, and selling of agricultural produce, ensuring better income and sustainability.
Producer companies combine the benefits of a cooperative society and a private limited company, offering limited liability protection to members while promoting community-based development.
Benefits of FPO Registration
Registering as a Farmer Producer Organization (FPO) offers numerous advantages to agricultural producers and farmer groups:
Limited Liability Protection
Members are not personally responsible for the company’s debts or liabilities, ensuring the safety of their personal assets.Access to Government Subsidies and Grants
FPOs are eligible for various government incentives, schemes, and subsidies, helping them access funds for growth and infrastructure.Better Access to Bank Credit
Banks and financial institutions prefer lending to registered FPOs due to their organised structure and collective financial strength.Increased Bargaining Power
By selling in bulk, FPOs can negotiate better prices for agricultural produce, enhancing members’ profitability.Improved Efficiency and Productivity
FPOs provide access to modern equipment, inputs, technology, and training, helping farmers increase yield and reduce costs.Enhanced Market Access
FPOs help farmers reach new and profitable markets, eliminating middlemen and ensuring fair pricing.
Eligibility Criteria for Registering a Farmer Producer Company
To register a Producer Company online in India, the following eligibility requirements must be met:
Minimum Members: At least 10 individual producers or 2 producer institutions.
Minimum Directors: A minimum of 5 directors.
Minimum Capital: ₹5 lakh paid-up capital is required.
Company Name: The name must end with “Producer Company Limited.”
Registered Office: The company must have a registered office address within India.
Documents Required for Producer Company Registration
PAN card and Aadhaar card of all members and directors
Passport-size photographs of all directors and members
Proof of registered office address (electricity bill, rent agreement, etc.)
Memorandum of Association (MoA) and Articles of Association (AoA)
Digital Signature Certificates (DSCs) of all directors
No Objection Certificate (NOC) from the property owner (if applicable)
Producer Certificate issued by competent authorities (if available)
Registration certificate of existing producer organisation (if applicable)
Objectives of a Producer Company (Section 581B of Companies Act, 2013)
The key objectives of a Producer Company include:
Promoting the production, harvesting, procurement, pooling, grading, and marketing of agricultural produce.
Providing financial services, including credit and insurance facilities to members.
Offering education, training, and technical services for capacity building.
Encouraging mutual assistance and cooperation among members.
Undertaking other activities beneficial to members and the agriculture sector at large.
Membership and Voting Rights
When Members are Individuals:
Each individual member has one vote, irrespective of shareholding or patronage.When Members are Institutions:
Voting rights depend on the participation of the institution in the company’s business during the previous year.Mixed Membership (Individuals + Institutions):
Each member—individual or institutional—has one vote each, ensuring fairness and equality.
Membership Rules and Restrictions
The company’s Articles of Association define conditions for membership and voting.
Voting rights can be restricted to active members in certain cases.
Any person having conflicting business interests cannot be a member.
If such interest arises later, they must withdraw membership.
Memorandum of Producer Company
The Memorandum of Association (MoA) must include:
Company name ending with “Producer Company Limited”
State of the registered office
Objectives aligned with Section 581B
Names, addresses, and occupations of subscribers
Share capital structure and division
Details of the first directors
Mention of limited liability of members
Shareholding details for each subscriber
Amendment of Memorandum
The company may alter its memorandum only through a special resolution, ensuring compliance with Section 581B.
A certified copy of the amendment must be filed with the Registrar of Companies (ROC) within 30 days.
If the change involves moving the registered office across states, prior approval from the Company Law Board is required.
Articles of Association (AoA)
The Articles of Association outline internal rules, governance, and management of the company. They must include:
Mutual Assistance Principles
Open membership for qualified individuals.
One-member-one-vote policy.
Election-based board governance.
Limited return on share capital.
Fair distribution of surplus for business development and community welfare.
Education on cooperative principles.
Collaboration with other organisations for mutual growth.
Specific Provisions
Membership qualifications and share transfer rules.
Patronage and voting rights.
Board powers, director elections, and meeting procedures.
Patronage bonus and fund management.
Guidelines for loans, credit, and contributions.
Provisions for merger, division, or joint ventures.
Amendment of Articles
Proposed by at least two-thirds of directors or one-third of members.
Adopted by a special resolution in a general meeting.
Certified copies of amendments must be filed with the ROC within 30 days of approval.
Conversion of Inter-State Co-operative Societies into Producer Companies
Existing inter-state cooperative societies can convert into producer companies by:
Passing a special resolution supported by two-thirds of members.
Submitting details of directors, chief executive, and members.
Providing a declaration of compliance with Section 581B activities.
Upon approval, the Registrar issues a Certificate of Incorporation, converting the cooperative into a producer company.
Share Capital and Member Rights
Producer companies issue only equity shares.
Member shareholding should ideally reflect their level of participation and contribution.
Proportional Patronage (Section 581ZB)
Member shareholding should be proportional to their contribution to the company.
Special User Rights (Section 581ZC)
Active members may be given special privileges, such as additional voting or supply rights, as determined by the company’s board.
FPO Registration Process Through A2Z Registration
A2Z Registration simplifies Producer Company Registration with an efficient 4-step online process:
Talk to Experts
Get expert consultation to understand eligibility, compliance, and benefits.Prepare Documentation
Our team helps you collect and verify all documents required for FPO registration.File Application
We file incorporation forms with the Registrar of Companies (ROC) and other authorities.Get Your Company Registered
Once approved, you receive your Certificate of Incorporation, confirming your company’s legal status.
Why Choose A2Z Registration
A2Z Registration (powered by A2Z Registration) provides end-to-end assistance for Producer Company incorporation in India.
We ensure:
Expert legal and documentation support
100% compliance with MCA regulations
Transparent pricing and professional guidance
Post-registration compliance assistance
Our mission is to simplify the registration process for farmers, agricultural entrepreneurs, and cooperatives, helping them build financially strong and legally compliant producer companies.