Once enough farmers have come together, the CBBO registers the FPO and sets up its board, its bank account and its first records. This part covers which agency handles which legal form, the support for registration costs, and the first records that later decide the equity grant.
The short version
- Producer companies are promoted by SFAC or NABARD; cooperatives by NCDC or NABARD.
- Registration costs are reimbursed up to ₹40,000 or the actual cost, whichever is less.
- The board must include at least one woman for the FPO to qualify for the equity grant.
- Open a bank account in the FPO's name early: management cost, the equity grant and loans all go there.
Who Registers the FPO
The CBBO registers the FPO and trains its directors; the legal form decides which implementing agency is involved.
| Legal form | Registered under | Implementing agency |
|---|---|---|
| Producer company | Companies Act (Part IXA of 1956 or Part XXIA of 2013) | SFAC or NABARD |
| Cooperative society | The state's Cooperative Societies Act | NCDC or NABARD |
Registering the FPO and training its Board of Directors on their roles, management and raising share capital are among the CBBO's duties. Registration is one of the milestones checked between six months and one year.
Source: Operational Guidelines 6.1, 7.3(d) and 7.4(c)(ii)
Registration Costs
Up to ₹40,000, or the actual cost if lower, is reimbursed from the management cost; anything above is the FPO's own expense.
The cost of incorporating the FPO under the Companies Act or registering it under a Cooperative Societies Act is reimbursable up to ₹40,000 or the actual cost, whichever is less. Any amount above that is paid by the FPO. The reimbursement is one of the heads of the ₹18 lakh management cost (see Part 9).
If registration costs ₹52,000, the scheme reimburses ₹40,000 and the FPO pays ₹12,000. If it costs ₹31,000, the full ₹31,000 is reimbursed.
Source: Operational Guidelines 10.1(ii) and 10.5
The First Board
The board should include women from the start, meet regularly and keep minutes, because the equity grant application asks for all of it.
The equity grant requires adequate representation of women on the Board of Directors or governing body, with at least one woman member. The application form also asks how the board was formed (election or nomination), the dates of board meetings in the last year, the FPO's functional committees, and each director's role, Aadhaar, DIN (for a company), qualifications, tenure and land holding.
The Addendum deleted the earlier condition that the FPO must have a separately constituted Management Committee to qualify for the equity grant.
Source: Operational Guidelines 11.3(vii) and Annexure I; Addendum item 15
Records to Keep from Day One
A clean share register, minutes and bank records from the first month make every later application easier.
Records to keep from the first month
- Share register: each member's name, gender, date of membership, share money paid, shares allotted, folio and share numbers
- Each member's land holding in acres and the land record (khasra) number
- Minutes of every board meeting and general meeting (AGM or EGM)
- Bank statements of the FPO's own account
- Books of account kept by the accountant, ready for audit
The management cost is paid directly into the FPO's bank account on the CBBO's recommendation, and the equity grant is transferred there too. For the equity grant, an FPO under one financial year old shows six months of bank statements authenticated by the branch manager; an older FPO shows audited accounts certified by a Chartered Accountant. The Addendum allows the management cost to pay for accounting software such as Tally.
Source: Operational Guidelines 8.2.1, 11.5 and Enclosure I of Annexure I; Addendum item 13
Check yourself
Tap an answer to see whether you are right, and why.
Which agencies can promote a producer company under the scheme?
- NCDC only
- SFAC or NABARD
- APEDA
SFAC and NABARD promote producer companies; NCDC and NABARD promote cooperatives.
Registration costs ₹55,000. How much does the scheme reimburse?
- ₹55,000
- ₹40,000
- Nothing
The limit is ₹40,000 or the actual cost, whichever is less.
What does the equity grant require of the board?
- At least one woman member
- At least ten members
- A government nominee
Clause 11.3(vii) requires adequate representation of women, with at least one woman.
Remember these things
- The CBBO registers the FPO; the legal form decides the agency.
- Registration costs are reimbursed up to ₹40,000.
- Put women on the board and keep minutes from the start.
- Keep a full share register and bank records from day one.
Part 9 starts Chapter 3 with the ₹18 lakh management cost, head by head. For FPOs whose members are also certified under PGS-India, KrushiFlow submits farmer records to the PGS-India portal in bulk.