How to Start a Farmer Producer Company in India

2. How to Start a Farmer Producer Company in India? • In India, farmers often face challenges related to market access, price fluctuations, and lack of organized support. To address these issues, the government introduced the concept of Farmer Producer Companies (FPCs). FPCs are a hybrid model that combines the benefits of cooperatives and private companies, giving farmers collective strength to improve their income, negotiate better prices, and access markets and resources efficiently. This blog will guide you through the process of starting a Farmer Producer Company in India. • What Is a Farmer Producer Company? • A Farmer Producer Company is a legal entity formed by a group of farmers (producers). It allows them to collectively engage in farming and agricultural activities, such as production, harvesting, procurement, processing, and selling agricultural products. These companies help farmers avoid exploitation by middlemen, increase profitability, and improve market access. • Key Features of a Farmer Producer Company • Members: Only farmers, agriculturalists, or individuals engaged in farming-related activities can become members. • Voting Rights: Each member has equal voting rights, regardless of the shares they hold. • Profit Sharing: Profits are shared among the members based on the business they conduct with the company, not on the basis of shares owned. • Legal Structure: An FPC is registered under the Companies Act of 2013, providing it with a legal framework for better functioning.

3. Steps to Start a Farmer Producer Company in India • Now that you understand the benefits of forming an FPC, let’s dive into the step-by-step process of starting one. • Minimum Requirements for Farmer Producer Company Registration in India • Before you start, make sure your group meets the following criteria: • Minimum 10 Members: You need at least 10 individual farmers to form a Farmer Producer Company. Alternatively, two producer institutions (like other FPCs) can also come together to form an FPC. • Directors: A minimum of five directors must be appointed. These directors will manage the company’s operations. • Capital: The minimum authorized capital for forming an FPC is ₹1 lakh. • 2. Name Selection • Choosing a unique name for your company is crucial. The name should clearly indicate that it is a "Farmer Producer Company" and should reflect the nature of the business. You can check the availability of the name on the Ministry of Corporate Affairs (MCA) portal. • 3. Obtain Digital Signature Certificate (DSC) • A Digital Signature Certificate (DSC) is required to file the registration documents online. All directors and shareholders must have their own DSC. You can obtain the DSC from authorized certifying authorities. • 4. Apply for Director Identification Number (DIN)

4. Each director of the Farmer Producer Company needs a Director Identification Number (DIN). You can apply for a DIN through the MCA portal by submitting an online application form along with the required documents like PAN and Aadhaar. • 5. Drafting of Memorandum and Articles of Association (MoA and AoA) • The Memorandum of Association (MoA) outlines the company's objectives, while the Articles of Association (AoA) define the company’s internal rules and regulations. These documents must be drafted carefully, as they are essential for Producer Company Registration in India. • 6. File Incorporation Documents • To register the Farmer Producer Company, you must submit the following documents to the Registrar of Companies (RoC): • Incorporation Application Form (SPICe+) • Memorandum of Association (MoA) • Articles of Association (AoA) • Directors' Details: A list of directors and their personal information (such as PAN, Aadhaar, and residential proof) must be provided. • Address Proof: Submit proof of the company’s registered office address. This can be an electricity bill, rent

5. agreement, or any other utility bill not older than two months. • Declaration: Each director must submit a declaration stating that they are not disqualified to act as a director. • Once these documents are submitted online, the RoC will review them. If everything is in order, the Registrar will issue a Certificate of Incorporation (COI), which confirms the formation of your FPC. • Once these documents are submitted online, the RoC will review them. If everything is in order, the Registrar will issue a Certificate of Incorporation (COI), which confirms the formation of your FPC. • 7. Apply for PAN and TAN • Once your Farmer Producer Company is incorporated, you must apply for the company's Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). These are required for conducting financial transactions and adhering to tax-related obligations. • 8. Open a Bank Account • You need to open a bank account in the name of the Farmer Producer Company. This account will be used for all business transactions, including investments and operational costs. • 9. Register for GST • If your company’s turnover exceeds the threshold limit for GST registration (₹20 lakhs for services and ₹40 lakhs for goods), you must apply for Goods and Services Tax (GST) registration.

6. Documents Required for Farmer Producer Company Registration • PAN and Aadhaar of all members and directors • Digital Signature Certificates (DSC) of directors • DIN (Director Identification Number) for all directors • Address proof of the registered office • Memorandum of Association (MoA) and Articles of Association (AoA) • Proof of ownership of office or rental agreement • Government Support for Farmer Producer Companies • The Indian government actively supports the formation of Farmer Producer Companies to empower small and marginal farmers. Some key initiatives include: • Equity Grant Scheme: This scheme provides equity grants to FPCs, enabling them to strengthen their capital base and increase their borrowing power. • Credit Guarantee Fund: The government offers credit guarantees to FPCs to encourage lending institutions to provide loans without collateral. • Subsidies and Loans: Many state and central government schemes offer subsidies and low-interest loans to help FPCs expand their operations and adopt better technologies.

7. Conclusion Starting a Farmer Producer Company in India is a great way for farmers to come together and leverage collective strength for better income and market access. With the right approach and legal support, you can ensure that your FPC not only benefits the community but also brings financial stability to its members. If you are thinking of forming a Farmer Producer Company, you can consult experts in Producer Company Registration in India to make the process smooth and hassle-free. With the right guidance, your FPC can become a successful venture that drives growth and prosperity for its members. Read more about: What is the Eligibility Criteria for Housing Finance Company Registration? What is Eligibility Criteria for Limited Liability Partnership Registration? Do you have any questions? info@enterslice.com +91 9870310368 www.enterslice.com