Producer Company

A Producer Company is a corporate body in India, formed by farmers to improve their income and support agricultural activities. It integrates producers for better access to markets, technology, and resources, ensuring sustainable development and economic welfare.

Click here

What is Producer Company

A Producer Company in India is a legally recognized corporate entity formed by farmers, producers, or primary agriculturalists to improve their income and support agricultural activities. Established under the Companies Act, 1956, and governed by Section IXA of the Act, a Producer Company integrates farmers to enhance their bargaining power, access to markets, technology, and financial resources. The primary aim is to ensure sustainable development, economic welfare, and fair trade practices among members. These companies can engage in activities related to production, harvesting, procurement, grading, pooling, handling, marketing, selling, or export of primary produce. They also provide technical services, consultancy, training, and welfare measures to their members, fostering better productivity and profitability in the agricultural sector.

T (23)

Benefits of Producer Company Registration

Improved Market Access:

Enables better market access and bargaining power for selling produce at competitive prices.

Economic Empowerment:

Enhances the economic welfare of members through collective efforts and shared resources.

Resource Sharing:

Facilitates access to modern technology, financial resources, and inputs like seeds and fertilizers, leading to increased productivity.

Sustainable Development:

Promotes sustainable agricultural practices, ensuring long-term environmental and economic benefits.

Authorized Activities of Producer Companies

The Producer Company is required to deal with the produce of its members and is authorized to carry on any of the following activities:
  • Processing (processing also includes, preserving, brewing, vinting,  drying, distilling, canning and packaging) of the produce of its members;
  • Manufacture, sale or supply of equipment, machinery or consumables to its producer members;
  • To provide education on the mutual assistance principles to the producer members of the producer company and others;
  • To render consultancy services, technical services, training, R&D and all other required activities for promoting the interests of producer members;
  • Generation, transmission and distribution of power, conservation and communication relatable to primary produce, revitalisation of land and water resources,
  • Insurance of the primary produce and its producer;
  • To promote the techniques of mutuality and mutual assistance;
  • The welfare of members as may be decided by the Board;
  • Financing of procurement, marketing, processing or other activities such as extending of credit facilities or any other financial assistance to its producer members.
  • Any other activity (ancillary or incidental to the main objectives of the producer company) in order to promote mutual assistance amongst the producer members and the lines of principles of mutuality.
Note: Primary produce has been defined under the Companies Act 1956 as produce arising from agriculture by a farmer which includes animal husbandry, floriculture, horticulture, viticulture, pisciculture, re-vegetation, bee raising, forestry, forest products and farming plantation products, produce of hand-loom, handicraft and other cottage industries.

Pre-Incorporation Checklist

  • Any 10 or more producers (individuals) 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.
  • A minimum paid-up capital is required to incorporate a producer company.
  • There should be a minimum of 5 directors (maximum of 15) in a producer company.
  • It can never be converted into a public company however it can be converted into a multi-state co-operative society.

Registration Procedure

The process of registering a Producer Company is similar to that of a Private Limited Company. Digital Signature (DSC) and Director Identification Number (DIN) must be obtained first for the proposed first Directors of the company. Once, Digital Signature (DSC) and Director Identification Number (DIN) are obtained, an application for name reservation is to be filed with the relevant Registrar of Companies (ROC).
There is a requirement under the Act that the name of a producer company must end with the words “Producer Limited Company”. Once, the suggested name is approved by the Registrar of Companies (ROC), an application for incorporation is to be filed in the prescribed format for the incorporation of the Producer Company. Once the Registrar is satisfied with the application and the required documents filed for incorporation of Producer Company, he will approve the same and issue Certificate of Incorporation.

Procedure and Documentation Required to Incorporate a Producer Company

  • The first step is to obtain a Digital Signature Certificate (DSC) from all the directors. Documents required to obtain a DSC are:
  • PAN Card of the Director
  • Aadhaar Card of the Director
  • Photo
  • Email Id
  • Contact Number
  • After obtaining the DSC, the next step is to obtain the Director Identification Number (DIN) by filing form DIR – 3 or SPICe+ Form along with a self-attested Identity proof, address proof, and a photo.
  • Then the name of the production company is to be finalized. For that, Form SPICe+ to the Registrar of Companies (ROC) is to be filed by giving 2 names in the order of preference along with the significance of the names. The name shall have the words PRODUCER COMPANY at the end.
  • After the name is approved by the ROC, the following documents are to be prepared:
  • The Memorandum of Association is to be drafted by incorporating all the objects that the company intends to follow.
  • The Articles of Association is to be drafted containing all the by-laws of the company.
  • An affidavit has to be signed by all the subscribers of the proposed company declaring their legal competency to act as the subscribers.
  • A utility bill and a NOC have to be taken 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.
  • All the drafted documents will be attached to Form SPICe+ and uploaded to the ROC website. On proper verification, the ROC will issue a Certificate of Incorporation and the company can start its business operations.
  • This form of establishment promotes the primary producer who is in a low-income group to optimize their income with collective bargaining and by selling the products directly to consumers.

FAQs on Producer Company Registration

A producer company is a type of corporate entity formed by primary producers (farmers, artisans, etc.) to collectively undertake production, harvesting, procurement, grading, pooling, handling, marketing, selling, and export of primary produce.

Any group of 10 or more individuals or two or more producer institutions (cooperative societies, associations of producers, etc.) engaged in primary production activities can form a producer company.

Benefits include access to better infrastructure, improved bargaining power, reduced costs through economies of scale, access to credit facilities, and increased income for members.

Requirements typically include a minimum number of members, primary production activities, compliance with the Producer Company Rules, and a registered office.

The registration involves filing an application with the Registrar of Companies (RoC), along with the necessary documents, such as the memorandum of association, articles of association, and a declaration from all members.

Yes, producer companies must hold annual general meetings, maintain statutory records, comply with taxation requirements, and submit annual returns to the RoC.