• Can a company buy agricultural land

Dear Lawyers,

We are going to create a company to buy an agricultural land. We are two directors, myself an Indian with an agricultural land and my partner who is an OCI resident in India. The land is in Karnataka and is in total 9 acres.
The activities in the farm will include: 
- agricultural cooperative: formed by associates who will equally share the produce from the land
- an equestrian center for learning
- fish farming
- bee keeping and
- home stay

can we buy the land in the name of the company, or we buy it in the name of the agricultural card holder and then later have it registered to the company.
Please let us know how we can go about registering it as a company and what are the required documents.

Thanks and regards,
Asked 1 year ago in Property Law from Bangalore, Karnataka
Religion: Other
1) section 79 A prohibits purchase of agricultural land by any person or family who have  annual income of more than Rs 25 lakhs from non agricultural sources 

2) Karnataka Land Revenue Act debars non-agriculturists from purchasing farm land, Section 109 says certain land can be exempted from the provisions of the act for the purposes of industry and horticulture, and for educational institutions, places of worship and housing projects.

3) Any company wanting to buy farm land has to go through the high-power committee before approaching the cabinet.

4)  Pvt. Ltd. company can buy agricultural land  and develop and perform agricultural activities on it, BUT SUBJECT TO the approved provisions of articles and the Memorandum of the pvt.ltd and MUST be approved by the Registrar of Companies 

5) The Articles of the Pvt. Ltd. co. should clearly outline the agricultural activities the Pvt. Ltd. proposes to indulge in.

6) Under the Companies Act, a regd. co. may perform those activities that are listed in the Objects, Articles and the memorandum. By virtue of its objects and articles, as regd. under the companies act, the Pvt. Ltd., (now non-person) can function and perform agricultural activities and need not be a agriculturist as in the case of an individual person.
Ajay Sethi
Advocate, Mumbai
46645 Answers
2759 Consultations

5.0 on 5.0

in simple terms in Karnataka non agriculturist cannot purchase agricultural land 

2) if you are forming company for purchase of agricultural land in Karnataka you have to obtain approval of high powered committee for purchase of agricultural land 

3) you would need approval from state govt of Karnataka 
Ajay Sethi
Advocate, Mumbai
46645 Answers
2759 Consultations

5.0 on 5.0

your query was can company buy agricultural land in Karnataka . 

2) further you had mentioned We are going to create a company to buy an agricultural land  of 9 acres and that your partner was OCI citizen of india 

3) it was in this context reply was given 

4) your attention was drawn to provisions of section 109 of karnataka land reform act 

5) further for purchase of agricultural land by company you  need approval of high powered committee 
Ajay Sethi
Advocate, Mumbai
46645 Answers
2759 Consultations

5.0 on 5.0

KARNATAKA LAND REVENUE ACT 79B. Prohibition of holding agricultural land by certain persons.—(1) With effect on and from the date of commencement of the Amendment Act, except as otherwise provided in this Act,—  
(a) no person other than a person cultivating land personally shall be entitled to hold land; and  
(b) it shall not be lawful for,-  
(i) an educational, religious or charitable institution or society or trust, other than an institution or society or trust referred to in sub-section (7) of section 63, capable of holding property;  
(ii) a company;  
(iii) an association or other body of individuals not being a joint family, whether incorporated or not; or  
(iv) a co-operative society other than a co-operative farm,  
to hold any land.  

The above law clearly states that a non-agriculturist/company shall not hold or buy any agricultural land until one of them is an agriculturist.

Further the same act under sub section states that :
(2) Every such institution, society, trust, company, association, body or co-operative society,—  
(a) which holds lands on the date of commencement of the Amendment Act and which is dis entitled to hold lands under sub-section (1), shall, within ninety days from the said date, furnish to the Tahsildar within whose jurisdiction the greater part of such land is situated a declaration containing the particulars of such land and such other particulars as may prescribed; and  
(b) which acquires such land after the said date shall also furnish a similar declaration within the prescribed period.

Thus if you intend to buy the agricultural land you may buy it on the name of an agriculturist. to be on the safer side and can convert into a company at a later stage gradually as per law in vogue.
T Kalaiselvan
Advocate, Vellore
36786 Answers
403 Consultations

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