What is a Producer Company?

What is a Producer Company?

What is a Producer Company?

In generic terms, producer companies can be said a legally recognized body of farmers/ agriculturists with the aim to improve the standard of their living, and ensure a good status of their available support, incomes and profitability.

Which law governed the Producer Company?

The formation and regulation of Producer Company is governed under the provisions of Sections 581A to 581ZL of Companies Act, 1956, read with Companies Act, 2013, and the rules made there under.

Producer Company can be recognized as a Private Company or Public Company?

The name of every Producer Company ends with Producer Company Limited which reflects that it is a Public Company but according to clause (5) of the section 581C of Companies Act, 1956, on registration the Producer Company shall become a body corporate as if it is a Private Company and shall not under be deemed as a Public Company any circumstances

What is the objective of Registration of Producer Company and how this is beneficial to Society at Large?

The main objective of the formation of producer company shall be :

  • To Produce, harvest, procure, grading, , handling, marketing, selling, export of primary production of the Members or import of goods or services for their benefit,
  • Processing including preserving, drying, distilling, brewing, canning, & packaging of the produce of its Members.
  • To do the Manufacturing, sale or supply of machinery, equipment or consumables mainly to its Members.
  • To provide education on the mutual assistance principles, to its Members & others.
  • Providing technical services, consultancy services, training, research & development & all other activities for the promotion of the interests of its Members.
  • Generation, transmission, & distribution of power, revitalization of water resources, their use, conservation & communication relatable to primary production.
  • Insurance of producers or their primary produce.
  • Promoting techniques of mutuality & mutual assistance.
  • Welfare measures or facilities for the benefit of Members as may be decided by the Board.


Basic Requirements for Producer Company Registration

  1. A producer can be formed with 10 or more producers (Individuals) but there is no upper limit on the number of members or, any 2 or more producer institutions can form a producer company.
  2. The minimum capital requirement for the formation of Producer Company is Rs.5,00,000.
  3. The producer company can be formed with minimum 5 director and maximum 15 directors in the company.
  4. The Producer cannot be converted into a public company but it can be converted into a multi-state co-operative society.


Documentation required to incorporate a Producer Company From All Directors and Shareholder:

Following documents are required for the formation of Producer Company:

  1. PAN Card of all Directors and Shareholders
  2. Latest Bank Statement/Telephone or Mobile Bill (As an Address Proof)
  3. Voter's ID/Passport/Driver's License (As an Id Proof)
  4. Passport-sized photograph of all directors and shareholder
  5. Email Id and Contact Number of all directors and shareholders
  6. Copy of any latest Utility bill (Electricity Bill/ Mobile Bill/ Gas Bill as an Registered Office proof)
  7. Copy of Rent agreement with NOC from the owner. (registered Office additional document)


Procedure to incorporate a Producer Company

  1. The first step is to create the Digital Signature Certificate (DSC) of all the Directors and Subscribers.
  2. Then the name of the production company is to be finalized. For that, Application for Reservation of Unique Number to be filed to the Registrar of Companies (ROC) by giving two names. The Producer company shall have the words PRODUCER COMPANY LIMITED at the end of its name.
  3. After the name is approved by the ROC, the following documents are to be prepared:

(i)  The Memorandum of Association is to be drafted by incorporating all the objects that the company intends to follow.

  1. The Articles of Association is to be drafted containing all the by-laws of the company.
  2. A declaration by a professional has to be drafted in the format of form INC – 8
  3. An affidavit has to be signed by all the subscribers of the proposed company declaring their legal competency to act as the subscribers.
  4. 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.
  5. The directors will give their consent to act in the Form DIR – 2 and details in DIR – 8
  6. After obtaining name approval, an incorporation application is filed in SPICE+ form along with    the necessary documents such as MOA, AOA, affidavit, and declaration with the MCA            (Ministry of Corporate Affairs).
  7.   After verification of the incorporation form, Certificate of Incorporation shall be issued by the concerned department.


  1. Open a Bank Account with minimum two officially nominated signatories in the name of the Company and deposit the paid up capital in company bank account and file form Inc-22 A within 180 days from the date of incorporation.
  2. After obtaining statement of Bank Account of the company, we need to file form 20A for commencement of the Company Business.

Benefits of Producer Company:

Following are the major benefits of formation of Producer Company:

  1. The members of the Producer Company receive the bonus in the ratio of the shares held by them.
  2. The Producer Company can avail the Tax benefits subject to the agriculture activity undertakes.
  3. Initially the members receive the value of the products supplied and this amount given at later stage in cash or in any kind.
  4. The members of Producer Company are primary producers and they can get financial assistance from time to time through credit facility related to business activity, loans and advances against any security mentioned in the articles.