In today's article from the "Lawyer on the Farm" series, we have prepared a collection of information for you about who can set up a group and how to do it.
As we wrote recently, agricultural producers can organize themselves into agricultural producer groups and their associations under the Act on Agricultural Producer Groups. Such a group of agricultural producers can be formed by individuals, organizational units without legal personality (e.g., a general partnership, a professional partnership), and legal entities (e.g., a limited liability company, a family foundation, an association) that, as part of their agricultural activities, run a farm within the meaning of agricultural tax regulations or a special branch of agricultural production.
Creating a producer group is a multi-stage process. The first step is to gather at least five farmers who produce the same product, such as grain, pigs, or tobacco. Next, the group must be registered with the National Court Register, and finally, it must be entered into the register of producer groups.
The biggest challenge, however, may be finding five farmers willing to establish a group. First, they must agree on whether they are truly interested in operating together and striving to improve their market position. Only then can they consider formally establishing the group and determining its future development and joint investments.
To register a group with the National Court Register, farmers must first decide on the legal form in which the group will operate. This may be a cooperative, a limited liability company, an association, or a union.
This choice will have a significant impact on the group's future development, as each form carries different legal consequences. Once the decision is made, the group becomes subject to the relevant regulations – for example, the Commercial Companies Code for limited liability companies, the Cooperative Law for cooperatives, the Law on Associations, or the Act on Social and Professional Organizations for associations. The articles of association must incorporate the provisions of the chosen act.
Additionally, if a group intends to apply for support, the articles of association must include the purposes for which the group was established and the minimum sales requirements.
Once entered in the National Court Register, the group can discontinue its activities at this stage. However, if it plans to benefit from funding, it must also register with the Agency for Restructuring and Modernization of Agriculture (ARiMR).
To obtain entry into the ARiMR register, a number of documents must be submitted, including the articles of association, a business plan, and declarations from each group member regarding their agricultural activities and annual revenues. It is also important that at least 80% of the products are produced and sold within the group. The articles of association are the company's statute or articles of association, which define the rules for operation, admission of new members, withdrawal from the group, transfer of shares, and any sanctions against members.
It's worth remembering that joining the group is for a minimum of five years. An application for recognition, including a National Court Register number, must be submitted to the director of the ARiMR field office.
We now warmly invite you to follow the series closely and read subsequent articles.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of May 7, 2025
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