Basic information


Producer Company primarily deals with agriculture and post-harvest processing activities. It is mainly registered with the main object of production, harvesting, procurement, grading, pooling, handling, marketing, selling and export of primary produce of the Members or import of goods or services for their benefit.  Producer Company requires ten or more producers (individuals); or two or more producer institutions; or combination thereof. The members have necessarily to be primary producers. Producer Company shall have at least five and not more than fifteen directors over 85% of the Farmers in India are small and marginal farmers with land holdings of less than 2 hectares. This fragmentation in farmers and farm lands, leads to disorganization and it is not viable for Indian farmers to adopt the latest technologies. By organization of these farmers into producer companies, economies of scale can be unlocked and the livelihood of farmers can be improved. Thus the concept of Producer Company is aimed at empowering farmers by creating farming clusters organized as Producer Company.


Advantages of Producer Company Registration


1. Separate Legal Entity: Producer Company is a legal entity and a juristic person established under the Companies Act, 2013. Therefore it is a form of organization has wide legal capacity and can own property and also incur debts. The members (Shareholders/Directors) of Producer Company have no personal liability to the creditors of a company for such debts.


2. Easy Management: No other approvals except the approval of members is required for any change management of Producer Company. The Board of Management controls the activities of the Producer Company.


3. Uninterrupted Existence: A producer company has 'perpetual succession', that is continued or uninterrupted existence until it is legally dissolved. A Producer Company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.


4. Owning Property: A producer Company being a juristic person, can acquire, own, enjoy and alienate property in its own name. No member can make any claim upon the property of the Producer Company as long as it is a going concern.


5.Better Credibility: Producer Company enjoys better credibility when compared to unregistered producer organizations. Producer Companies are registered and monitored by the Central Government. Producer Organization are on the other hand governed and monitored by State Governments.