Enquiry

A-207, Knox Plaza, Near Sheetal Banquet, Chincholi Bunder, Malad (W), Mumbai - 400 064

Blog

blog

Foreign Contribution and Regulation Act, 2010

The FCRA was enacted with the primary purpose of regulating the inflow of foreign contributions and ensuring that the received foreign contributions are not utilized for illegal purposes. All charitable organizations in India receiving foreign contributions come under the purview of this Act. Over the last few years, the Home Ministry has been scrutinizing the flow of foreign funds to all charitable organizations in India and the Ministry has also cancelled the licenses of over 8000 charitable organizations due to non-compliance with the reporting requirements stipulated under the Act. 


Object of the Act


Foreign Contribution and Regulation Act 2010 (FCRA) is enacted with the following objects:


  • To regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain individuals or associations or companies and 
  • To prohibit acceptance and utilization of foreign contribution or foreign hospitality for any activities detrimental to national interest and for matters connected therewith or incidental thereto.


Key Definitions


  • Foreign Contribution


As defined in Section 2(1)(h) of FCRA, 2010, "foreign contribution" means the donation, delivery or transfer made by any foreign source ?


  • of any article; 

Exemption: An article given to a person (includes Individual, HUF, Company, Association) as a gift for his personal use and the market value of such article in India, on the date of such gift is not exceeding Rs. 25,000/-.

  • of any currency, whether Indian or foreign;
  • of any security as defined in Section 2(h) of the Securities Contracts (Regulation) Act, 1956 and includes any foreign security as defined in clause (o) of Section 2 of the Foreign Exchange Management Act, 1999.


Specific inclusion


A donation, delivery or transfer or any article, currency or foreign security by any person who has received it form any foreign source, either directly or through one or more persons, shall also be deemed to be foreign contribution with the meaning of this clause.


The interest accrued on the foreign contribution deposited in any bank or any other income derived from the foreign contribution or interest thereon shall also be deemed to be foreign contribution within the meaning of this clause.




Specific exclusion


Any amount received from any foreign source in India, by way of fee (including fees charged by an educational institution in India from foreign student) or towards cost in lieu of goods or services rendered by such person in the ordinary course of his business, trade or commerce whether within India or outside India or any contribution received from an agent or a foreign source towards such fee or cost shall be excluded from the definition of foreign contribution within the meaning of this clause.


  • Who can receive foreign contribution?


  • Individual; 
  • HUF; 
  • Association like Trust, Society and Section 8 Company;


  • Can Private Companies receive foreign contribution?


Yes. Any Private Company can receive foreign contribution if they wish to do charitable work at some point of time subject to following conditions:-


  • It must have a definite cultural, economic, educational, religious or social program.
  • It must obtain the FCRA registration / prior permission from the Central Government.
  • It must not be prohibited under Section 3 of FCRA, 2010.


  • Who cannot receive foreign contribution?


As defined in Section 3(1) of FCRA, 2010, the following are prohibited to receive foreign contribution:


  • A candidate for election;
  • Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper;
  • Judge, government servant or employee of any Corporation or any other body controlled on owned by the Government;
  • Member of any legislature;
  • Political party or office bearer thereof;
  • Organization of a political nature as may be specified under sub-section (1) of Section 5 by the Central Government.
  • Association or company engaged in the production or broadcast of audio news or audio visual news or current affairs program through any electronic mode, or any other electronic form as defined in of Section 2(i)(r) of the Information Technology Act, 2000 or any other mode of mass communication;
  • Correspondent or columnist, cartoonist, editor, owner of the association or company referred to above point.
  • Individuals or associations who have been prohibited from receiving foreign contribution.

FCRA Registration 


Eligibility criteria


  • An association should be registered either under the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or under Section 8 (erstwhile Section 25) of the Companies Act, 2013;
  • An association normally be in existence for at least 3 years and has undertaken reasonable activity in its chosen field for the benefit of the society for which the foreign contribution is proposed to be utilized. 
  • An association should have spent at least Rs.10,00,000/- over the last 3 years on its aims and objects, excluding administrative expenditure. 
  • Statements of Income & Expenditure, duly audited by CA, for last 3 years are to be submitted to substantiate that it meets the financial parameter.


Prior Permission - if an Association is not 3 years old? 


Eligibility criteria


An organization with less than 3 years of existence is not eligible for registration. Such organization may apply for grant of prior permission under FCRA, 2010. Prior permission is granted for receipt of a specific amount from a specific donor for carrying out specific activities/projects. For this purpose, the association should meet following criteria:


  • Should be registered either under the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or under Section 8 (erstwhile Section 25) of the Companies Act, 2013;
  • Submit a specific commitment letter from the donor indicating the amount of foreign contribution and the purpose for which it is proposed to be given. 


  • For Indian recipient organizations and foreign donor organizations having common members, FCRA Prior Permission shall be granted to the Indian recipient organizations subject to its satisfying the following:


  • The Chief Functionary of the recipient Indian organization should not be a part of the donor organization.
  • At least 51% of the office-bearers/ members of the Governing body of the Indian recipient organization should not be members/employees of the foreign donor organization.
  • In case of foreign donor organization being a single person/individual that person should not be the Chief Functionary of the recipient Indian organization.
  • In case of a single foreign donor, at least 51% office bearers/members of the governing body of the recipient organization should not be the family members and close relatives of the donor.




General conditions for grant of registration and prior permission


The 'person' making an application for registration or grant of prior permission-


  • is not fictitious or benami;
  • has not been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another;
  • has not been prosecuted or convicted for creating communal tension or disharmony in any specified district or any other part of the country;
  • has not been found guilty of diversion or mis-utilisation of its funds;
  • is not engaged or likely to engage in propagation of sedition or advocate violent methods to achieve its ends;
  • is not likely to use the foreign contribution for personal gains or divert it for undesirable purposes;
  • has not contravened any of the provisions of this Act;
  • has not been prohibited from accepting foreign contribution;
  • the person being an individual, such individual has neither been convicted under any law for the time being in force nor any prosecution for any offence is pending against him.
  • the person being other than an individual, any of its directors or office bearers has neither been convicted under any law for the time being in force nor any prosecution for any offence is pending against him.


The acceptance of foreign contribution by the association/ person is not likely to affect prejudicially –


  • the sovereignty and integrity of India;
  • the security, strategic, scientific or economic interest of the State;
  • the public interest;
  • freedom or fairness of election to any Legislature;
  • friendly relation with any foreign State;
  • harmony between religious, racial, social, linguistic, regional groups, castes or communities.


The acceptance of foreign contribution shall not lead to incitement of an offence and shall not endanger the life or physical safety of any person.


Separate Bank Account for receiving Foreign Contribution


The foreign contribution should be received only in the exclusive single FC account of a Bank (also called designated FC account), as mentioned in the order for registration or prior permission granted and should be separately maintained by the association. However, one or more accounts (called Utilization Account) in one or more banks may be opened by the association for utilizing the foreign contribution after it has been received in the designated FCRA bank account, provided that no funds other than that foreign contribution shall be received or deposited in such account or accounts and in all such cases, intimation in FC-6 is to be given online within 15 days of opening of such account.


Procedure for making application for registration/prior permission


Application for grant of registration / prior permission is to be submitted online in form FC-3 at the website fcraonline.nic.in


Documents required


For Registration


  • Jpg file of signature of the chief functionary 
  • Self-certified copy of registration certificate/Trust deed etc. of the association 
  • Self-certified copy of relevant pages of Memorandum of Association/ Article of Association showing aim and objects of the association.
  • Activity Report indicating details of activities during the last three years; 
  • Copies of relevant audited statement of accounts for the past three years (Assets and Liabilities, Receipt and Payment, Income and Expenditure) clearly reflecting expenditure incurred on aims and objects of the association and on administrative expenditure; 


For Prior Permission


  • Jpg file of signature of the chief functionary 
  • Self-certified copy of registration certificate/Trust deed etc., of the association 
  • Duly signed Commitment Letter from Donor.
  • If functioning as editor, owner, printer or publisher of a publication registered under the Press and Registration of Books Act, 1867, a certificate from the Registrar of Newspapers for India that the publication is not a newspaper in terms of section 1(1) of the said Act.


Fees


  • Rs. 2000/- for registration and 1000/- for prior permission (to be paid online


Validity & renewal


Registration shall be valid for a period of 5 years and thereafter application for renewal of registration may be made before 6 months from the expiry of their existing registration.


Exemption from registration/prior permission


  • Donation by NRI 


Contributions made by a citizen of India living in another country (Non-Resident Indian), from his personal savings, through the normal banking channels are not treated as foreign contribution. 


  • Foreign remittances from relative


Foreign remittances from relatives are not treated as foreign contribution. However, any person receiving foreign contribution in excess of Rs. 1 lakh or equivalent thereto in a financial year from any of his relatives shall inform the Central Government in Form FC-1 within 30 days from the date of receipt of such contribution. 


  • Govt. Department


All bodies constituted or established by or under a Central Act or a State act requiring to have their accounts compulsorily audited by Comptroller & Auditor General of India are exempted from the operations of all the provisions of FCRA, 2010.


Annual Filing 


An association permitted to accept foreign contribution is required to maintain separate set of accounts and records exclusively for the foreign contribution received and submit an annual return, duly certified by a CA, giving details of the receipt and purpose-wise utilization of the foreign contribution. Annual returns of association are required to be filed in form FC-4 accompanied with scanned copies of income and expenditure statement, balance sheet and statement of receipt and payment, online at fcraonlineservice.nic.in within a period of 9 months from the closure of the year i.e. by 31st December each year.


Submission of a ‘NIL’ return, even if there is no receipt/utilization of foreign contribution during the year, is mandatory. However, in such case, certificate from Chartered Accountant, audited statement of accounts is not required to be uploaded. 


An association not filing annual return on time may face penalty for of late submission of return and even cancellation of registration.


Mapping of various e-forms required to be filled under FCRA, 2010


Form 

Purpose

FC-1

  • Intimation of receipt of foreign contribution by way of gift from relative by an individual;
  • Intimation about Foreign Contribution by way of articles from relative by an individual;
  • Intimation about Foreign Contribution by way of Securities;
  • Intimation of receipt of Foreign Contribution by a candidate for Election;

FC-2

Application for seeking prior permission to accept foreign Hospitality;

FC-3

  • Application for FCRA registration;
  • Application for prior permission;
  • Application for renewal of FCRA registration;

FC-4

Annual Return

FC-5

Application for seeking permission for transfer of foreign contribution to other unregistered person;

FC-6

  • Intimation of change of Name, Address, Bank details, Key members;
  • Intimation of quarterly receipt of foreign contribution; 
  • Filing of annual returns of assets and liabilities by association ;


Thank You.


Any query or suggestion may be forwarded to dvg.pcs@gmail.com


To receive our updates and write-ups on Whatsapp, ping your name, city and profession to +91 9427675100

. . .

Read More
blog

Entering into Practice of CS – But When?

Entrepreneurship is about being able to face failure, manage failure and succeed after failing. 


With these words, I am starting this write up to help young professionals facing dilemma about when to enter into Practice i.e immediately after getting degree or after getting some experience in big firms, listed company or whatever. 


See, there is no right time to start Practice. There is my way, there is your way and there are other ways to start a practice. Depending upon your skills to handle particular assignment, number of contacts you have, you need to choose an option. I know many CA, CS who started their practice only after getting degree and at that time having not much learning beyond basic knowledge but now they are taking big assignments and place themselves as successful professionals.


I am sharing my journey for your reference, it might help someone to resolve dilemma of when to enter into practice:


I did my articleship in mid size PCS firm based at Ahmedabad having Practice of Company Law with Private Companies as their portfolio of clients. During my 15 months of training, I learnt basic ROC Compliances. After completing my training, I decided to not start job anywhere rather sharpen my skills first to place myself as successful professional. So, I started reading various laws, improve my drafting skills, language fluency etc. 


Thereafter, I decided to start my own practice in a city which is completely new for me (Mumbai – City of Dreamers) with a dream to become number 1 firm in India. In initial days of my practice, I spent almost 5-6 hours in reading and 1-2 hours in article writing. Every day, I learnt something new and prepare checklist that what services that can be offered to client out of my learnings.


Since 1 fantastic year passed as a PCS, Now, I am able to take up assignment of Listed Company Compliances, NCLT matters, Trademarks, Copyrights, Contract and Agreement Drafting, MSME pending dues cases, Startup funding support, NGO registration and funding, FDI approvals, etc etc. Infect, I am involved in many of the assignment above which was new for me but still I could give full justice to these assignments only because of 100% burning craving and of course with the knowledge of the subject matter. 


So, for aspiring PCS, ask these questions to yourself before starting independent practice:


  1. Can I complete any means any assignment independently without support of anyone?
  2. Do I have 1-2 years financial support if there is no breakeven point?
  3. Do I have sufficient contacts or having support from friends, relatives?
  4. Do I have burning desire to become PCS? 


If answer to the above questions is YES, you can start practice after getting your degree. But still the main question arises, how one can get clients? I am sharing my experience that might help you.


  • I started my own blogs www.csdvg.com/blog to share my article.
  • I started FB page, whatsapp broadcast list, groups to deliver my knowledge to the professional friends.
  • I started sharing knowledge on various mediums available i.e magazine of professional institutes like ICSI, ICAI, websites like TaxGuru, CAClubIndia etc.
  • I registered my business on justdial where we can get clients (Registration in justdial or similar platform is ethical and our institutes allows it)
  • I offer some form of referral to my existing clients if they give new clients. 


Any by applying all above means, I started receiving inquiries first thereafter it turned into prospective clients and some of them are my clients now. So, I am sure that by putting all these efforts, you can receive clients not immediately but within 1-2 years you can start earning like what your friends are earning in form of salary.


Entrepreneurship is like living few years of your life like most people won’t so that you can spend rest of life like most people can’t. 


With theses closing remarks, I rest my write up with the notion that it might help someone. If you like it, share with your friends and professional colleague. 


For receiving updates on whatsapp, ping us your name, city and occupation to +91 94276 75100.


Thank you.

. . .

Read More
blog

ACTIVE COMPANY TAGGING IDENTITIES AND VERIFICATION - ACTIVE FORM INC-22A

The Ministry of Corporate Affairs has come up with the KYC of registered office of the Companies wherein Rule 25A has been inserted in the Companies (Incorporation) Rules, 2014 that shall come into force w.e.f. 25th February 2019 vide notification dated 21st February, 2019.


Rule 25A: Every company incorporated on or before the 31st December, 2017 shall file the particulars of the company and its registered office, in e-Form INC-22A [ACTIVE (Active Company Tagging Identities and Verification)] on or before 25th April, 2019.

Why such requirement came up?


  • There are many shell companies which are created either to evade taxes or with malafide intention. 
  • During demonetization, there are many inactive companies which have deposited heavy cash into their bank account. Such companies’ balance sheet, annual returns or other details are not available.  
  • There are many companies which registered office is either not traceable or having incorrect address.


To solve all above issues, Govt. has came up with one time compliance to ensure that company is active with its registered office. Govt. has also empowered ROC to physically verify the registered office if they thought. So, by requiring photos, Govt. want data bank of photos of registered office which can be used in future, if required. 


Particulars and documents required to be filled in ACTIVE form


  • Name, Address and Email Id of Company; [Email Id to be verified through One Time Password (OTP)]
  • Latitude and Longitude of registered office of Company;
  • Details of Directors, CS and KMP of Company, Their PAN and Membership Number; 
  • If CS or KMP is not appointed, then this form will not proceed further and Company has to comply respective provisions before filing of this form.
  • All Directors DIN must be active.
  • Details of Statutory Auditor and Cost Auditor;
  • SRN of last year annual filing forms i.e AOC-4 and MGT-7;
  • 2 Photographs of registered office one showing external building and other inside office showing at least 1 Director/KMP who has affixed his/her signature on this form;
  • Photographs must be in PDF format as only PDF attachments are allowed currently. 
  • Form must be certified by 1 Director and 1 KMP or 2 Directors in case KMP provisions are not applicable.


Professional Certification


This form needs to be certified by a Practicing CS/CA/CMA. Professional need to certify about the correctness of Email Id, Registered office photos, Directors DIN status, CS and KMP appointment provisions etc.


Fees


Upto 25th April, 2019 – Nil, After 25th April, 2019 – Rs. 10,000/-


Which Company will be unable to file this form?


  • Companies which has not filed its financial statements i.e AOC-4 or annual returns i.e MGT-7
  • Companies which has not appointed CS, KMP or appointed but not filled form with ROC.


Exemption from filing 


Companies which have been struck off or are under process of striking off or under liquidation or amalgamated or dissolved as recorded in the register, shall not be required to file e-Form ACTIVE. 


Effect of Non-Compliance 


In case a company does not file this form, the Company shall be marked as “ACTIVE-non-compliant” on or after 26th April, 2019 and shall be liable for action under section 12(9) i.e Registrar may without prejudice to the provisions of section 12(8), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.


The following event based information or changes shall be not be accepted by the Registrar from such non compliant companies –


  • SH-07 (Change in Authorized Capital); 
  • PAS-03 (Change in Paid-up Capital); 
  • DIR-12 (Changes in Director except cessation); 
  • INC-22 (Change in Registered Office); 
  • INC-28 (Amalgamation, de-merger). 
. . .

Read More
blog

FAQs on Secretarial Compliance Report

Secretarial Audit and Secretarial Compliance Report


The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have been amended to include the following Regulation:


24A: Secretarial Audit


Every  listed  entity  and  its  material   unlisted  subsidiaries  incorporated   in  India  shall   undertake  secretarial  audit   and  shall  annex   with  its  annual  report, a secretarial audit report, given by a company secretary in practice, in such form as may be prescribed with effect from the year ended March 31, 2019.”


FAQ -1: Secretarial Audit applies to whom?

Ans: The following class of companies requires Secretarial Audit Report

  • Every Listed Entity;
  • Material unlisted Subsidiary of Listed Entity;
  • Every Public Company having share capital more than Rs. 50 Crore;
  • Every Public Company having turnover more than Rs. 250 Crore;


FAQ-2: What is Material Unlisted Company?

Ans: “Material Unlisted Subsidiary” means a subsidiary of a listed company whose income or net worth exceeds 10 % of the consolidated income or net worth, respectively, of the Company and its Subsidiaries in the immediately preceding accounting year.


FAQ-3: What is the format of Secretarial Audit Report?

Ans: Format of Secretarial Audit Report will continue to be MR-3.  


FAQ-4: What is Secretarial Compliance Report?

Ans: It is report on compliance of SEBI act, regulations, circulars, guidelines etc. So, it specifically deals with SEBI regulation angel. 


FAQ-5: What is the difference between Secretarial Audit and Secretarial Compliance Report?

Ans: Secretarial Audit covers broad check on compliances of overall applicable acts to the Company like SEBI Act, Companies Act, Depositors Act, FEMA, SCRA and other industry specific laws while Secretarial Compliance Report covers only SEBI Act and its regulations, circulars issued thereunder.


FAQ-6: Who will issue Secretarial Compliance Report?

Ans: A whole time Practicing Company Secretary.

FAQ-7: Secretarial Compliance Report applies to whom?

Ans: Every Listed Entity. (Not applicable to Material Unlisted Subsidiary)


FAQ-8: What is the format of Secretarial Compliance Report?

Ans: https://www.sebi.gov.in/legal/circulars/feb-2019/format-for-annual-secretarial-audit-report-and-annual-secretarial-compliance-report-for-listed-entities-and-their-material-subsidiaries_42015.html 


FAQ-9: What is the time limit of Submission of Secretarial Compliance Report?

Ans: Within 60 days from the closure of Financial Year.


FAQ-10: Whether Secretarial Compliance Report is required to be filled with RoC?

Ans: No. As of now, it is required to be filed only with Stock Exchanges. However, it is advisable to attach it in MGT-7 and must be incorporated in Annual Report after Secretarial Audit Report. 


FAQ-11: Can same PCS who performs Secretarial Audit can issue Secretarial Compliance Report?

Ans: Yes. There are no restrictions in the SEBI circular for the same. However, it is advisable to retain different PCS for Secretarial Audit and Secretarial Compliance Report to independent check and balance of each other.  


FAQ-12: From When, Secretarial Compliance Report is applicable?

Ans: From F.Y ending 31st March, 2019.    


A Practicing Company Secretary has to report on applicable SEBI regulations, its compliance, deviation, if any and his/her independent remark of particular deviation.


A Practicing Company Secretary has to not only audit previous F.Y but he/she has to comment on action taken by listed entity on deviation pointed out in previous compliance report.

. . .

Read More
blog

ISSUE OF SHARES BY PRIVATE COMPANY

We have authored a small e-book containing provisions for issue of shares and other securities by private limited company. 

E-book on Issue of Share by Pvt Co.pdf

. . .

Read More
blog

PRODUCER COMPANY REGISTRATION PROCESS AND BENEFITS

Producer Company


Majority of farmers and primary producers in India are small and marginal with fewer resources. Indian farmers are poor and uneducated. They don’t know latest technology and even they can’t bargain with the merchants to get fair price of their produce. That is the reason why the concept of producer companies came into existence.


Producer Companies are legally recognized body of farmers/agriculturists/primary producers with the aim to improve the standard of their living, and ensure a good status of their available support, incomes and profitability. By organization them into producer companies, economies of scale can be unlocked and their livelihood can be improved. 


Producer Company is a company registered under the Companies Act which has the objective of production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit. 


‘Primary produce’ means:


  • Produce of farmers, arising from agriculture (including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, re-vegetation, bee raising and farming plantation products), or from any other primary activity or service which promotes the interest of the farmers or consumers; or
  • Produce of persons engaged in handloom, handicraft and other cottage industries;
  • Any product resulting from any of the above activities, including by-products of such products;
  • Any product resulting from an ancillary activity that would assist or promote any of the aforesaid activities or anything ancillary thereto;
  • Any activity which is intended to increase the production of anything referred above or improve the quality thereof;


Therefore, a Producer Company deals primarily with agriculture and post harvest processing activities.


Objects or Activities of the Producer Company 


  • Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary production of the Members or import of goods or services for their benefit, provided that the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution.
  • Processing including preserving, drying, distilling, brewing, vinting, canning, and packaging of the produce of its Members
  • Manufacture, sale or supply of machinery, equipment or consumables mainly to its Members.
  • Providing education on the mutual assistance principles, to its Members and others.
  • Rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members.
  • Generation, transmission, and distribution of power, revitalization of land and water resources, their use, conservation and communication relatable to primary produce.
  • Insurance of producers or their primary produce.
  • Promoting techniques of mutuality and mutual assistance.
  • Welfare measures or facilities for the benefit of Members as may be decided by the Board.
  • Any other activity, ancillary or incidental to any of the activities referred above which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner.
  • Financing of procurement, processing, marketing or other activities referred above which include extending of credit facilities or any other financial services to its Members.


Procedure for Producer Company Registration


Things to be kept in mind before registration


  • 10 or more Individual producers can join together to form a production company but there is no upper limit on the number of members OR any 2 or more producer institutions can form a producer company.
  • There should be minimum 5 directors and maximum of 15 in a producer company.
  • No person, who has any business interest which is in conflict with business of the Producer Company, shall become a Member of that Company.
  • The name of the Company shall end with “Producer Company Limited” which shall be stated in the Memorandum.
  • The AOA and MOA of Producer Company shall be prepared in accordance with the provision under section 581F and 581G of Companies Act, 1956.
  • One-fourth of the total membership shall constitute the quorum at a General Meeting.
  • Share Capital of a producer company shall consist of equity shares only.


Incorporation Process


Name Availability 


A Producer Company name must follow suffix ‘Producer Company Limited’. The word private isn’t used in the name and the absence of which does not indicate that the company is a public. For e.g: Maahi Milk Producer Company Limited. You can file 2 names in “RUN” facility of MCA for name availability. Attach activity letter stating main object of proposed company while filing name availability. 


Obtain Digital Signature


Apply for Class 2 Digital Signature of proposed first Directors. Id Proof, Address Proof, Photo, Email Id, Phone No. etc. will be required for Digital Signature. 


Drafting of Memorandum and Articles of Associations


MOA and AOA are basically the charter and internal rules and regulations of the Company. Thus, it is essential to be drafted with the greatest care and with the guidance of the experts. MOA and AOA must be signed by the requisite subscribers, i.e. 10 or more individuals, each of them being a producer or 2 or more producer institutions or a combination of ten or more individuals and producer institutions. Each subscriber to the memorandum shall write in his/her own hand, his/her father/husband’s name, occupation, address and the number of shares subscribed for by him/her. The signature of all the subscribers shall also be witnessed. The witness shall also sign and write in his own hand, his name, his father’s name, occupation, and address.


Filing of Documents and Forms electronically with Registrar of Companies


File e-form SPICe-32 attaching following documents:


  • Memorandum of Association
  • Article of Association
  • An self declaration in form INC-9 signed by all the subscribers and first directors of the proposed company; (On Plain Paper)
  • Consent and Declaration by first Directors in form DIR-2; (On Plain Paper)
  • A latest utility bill of registered office; (Telephone/Gas/Electricity Bill)
  • NOC from the owner whose address is to be used as the registered office of the company. If it is not owned, a lease agreement will be attached to the form;
  • Id Proof and Address Proof of first Directors;
  • If the subscriber is a body corporate, Certified True Copy of Board Resolution authorizing a person to sign the Memorandum & Articles on its behalf.


On proper verification, the ROC will issue a Certificate of Incorporation and the company can start its business operations.


Certificate of Incorporation of the Producer Company


Once the registrar fully gratified, that all the necessities of this Act have been obeyed with in respect of registration & matters precedent and incidental thereto, he shall within 30 days of the receipts of documents required for registration, register the memorandum, articles and other documents, if any, and issue a Certificate of Incorporation under this Act. The Registrar will issue the Certificate of Incorporation bearing a Corporate Identification Number (CIN) consisting of 21 digits within 30 days of the receipt of the documentation required for registration.


Benefits to the Members of Producer Companies


Value of Produce


The members of the producer company will pool their produce together to sell in the market. The members of the producer company will receive the value for the produce pooled and supplied as determined by the directors. This amount will be given out later in the form of cash/ kind/ equity shares.


Bonus Share


The members of the producer company will be entitled to get bonus shares in the same proportion to the shares held by them.


Patronage Bonus


The surplus after providing provision for payment of limited return and reserves may be given as patronage bonus to the members of the producer company. Patronage bonus signifies a distribution of the surplus income to the members of the producer company in proportion to their respective patronage. Patronage, on contrary, is the participation by members in their business activities by using the services offered by producer company.

. . .

Read More