The rural production society is a form of ejidal association that originates with the purpose of promoting rural activities. Rural production companies are attached to the normal regime as limited company or unlimited company.
In the case of a limited company, in the event of a claim by a third party, the partners are obliged to respond for the obligations contracted by the company according to the capital stock contributed. However, in the case of unlimited partnerships, the partners are individually liable for all obligations jointly and severally.
In addition, in these rural production companies the figure of supplemented responsibility is used, which implies that the partners respond above their contribution to the capital stock in a subsidiary manner up to a specific amount established in the articles of incorporation of the company.
Its activity consists of joining the efforts of several individuals who work in the field and thus achieve common benefits. The rural production society is a way to increase the chances of success in rural areas.
characteristics
-Its main objective is to plan and organize productive economic activities, sales and reciprocal support in order to satisfy both private and societal needs.
-Normally they have a minimum of two partners, which can include individuals: there are usually two more people (who are rural producers), in addition to small owners of rural properties, ejidos, etc.
-These companies are constituted with a minimum capital that changes according to the liability regime they use.
-Your name as a company ends in “Sociedad de Producción Rural” or “SPR”
-The people who make up the Board of Directors and Supervisory Board of the rural production company only have said position for a period of three years.
-The rights of the members who are part of the rural production society are transferable, although it is a requirement to have the authorization of the Assembly. In addition, sometimes it is necessary to claim consent to transmit those rights to the financial institution with which it is obliged.
- The board or the supervisory council are responsible for selecting the person in charge of managing the accounts of the rural production company. This position must be ratified by the general assembly of partners.
Advantage
-By grouping different strategies, they achieve an increase in the integration of the sector.
-They are partially exempt from the payment of Income Tax.
-The representative positions within the rural production society are not permanent and this guarantees a necessary and very interesting rotation, to give entry to new proposals and growth projects.
- Team activity without time constraints allows them to create, innovate, analyze and initiate innovative projects that, on the one hand, encourage social improvement; and on the other, they promote productive investment.
-It works to reduce the gaps in the rural sector, encouraging the existing potential through the instruments that facilitate the production process, as well as the subsequent sale.
Disadvantages
-Slowering decision making; having to make some common decisions and, at times, with the consent of the Assembly, can delay the selection of an option. Today, with such dynamic, fast and changing markets, it can become a significant disadvantage.
-There is no specific training for its members. The partners of a rural production society are usually experts in the agricultural sector and production. However, sometimes they do not have the specific training and it is difficult for them to comply with accounting tasks or carry out essential administrative procedures in any business.
- There is usually complexity and problems when it comes to obtaining external financing from banks and financial institutions. Due to their peculiar structure, these companies are not so attractive to provide loans, since they can be considered high risk.
-They do not have the approval of government entities until many years have passed, so it is difficult to get them to present themselves as clients of rural production companies.
How is a rural production society managed?
Its constitution is formalized by means of economic or in-kind contributions from the partners. When it comes to unlimited liability companies, no initial outlay is necessary.
On the contrary, limited liability companies require an initial contribution in order to establish a minimum capital, which has to be equal to 700 times the current daily minimum wage in the country.
As for supplemented liability companies, an initial contribution is essential, which is assigned to the formation of a capital of at least 350 times the general daily minimum wage in the country.
The General Assembly of rural production societies is constituted as the superior authority. This Assembly establishes a Board of Directors that includes a president, a secretary, a treasurer and the members, which are stipulated in the bylaws of the society.
Example
Mr. Castellanos has a company that produces apricot jams. Its production is stable and it makes profits, although not enough to maintain the expenses it has.
His farm has 1000 hectares of land, a family inheritance that he received from his grandparents; the problem is that it does not use all the land for the production of jams.
At a fair for farmers and ranchers in the area, he met Mr. Gallego and they began to talk about the possibility of establishing a rural production company that benefits both entrepreneurs.
Mr. Gallego raises horses on a nearby farm and his business is expanding, although he needs more land to do so. The two entrepreneurs agree to unify their resources to jointly manage their businesses.
Each of the partners knows little or nothing about the other's business; Therefore they decide that it is interesting to share their knowledge and support each other.
Their agreement to establish a rural production company is to each contribute a specific amount - in money or in kind - and determine that their company is limited liability.
References
- Legal definition. Rural Production Societies. Definicionlegal.blogspot.com
- Mipymme. Rural Production Societies. Mipyme.org
- Francisco Marquez. The action of the notary in rural production companies. magazines-colaboracion.juridicas.unam.mx
- L XIII Legislature. Rural Production Societies. diputados.gob.mx
- Applied Fiscal Intelligence, SC Rural Production Societies. blogifa.wordpress.com