Producer Company

Overview

A Producer Company is a body corporate formed by primary producers such as farmers, artisans, or others engaged in production, governed by the producer company provisions of the Companies Act, 2013. It allows producers to pool resources for activities like production, harvesting, procurement, processing, and marketing while enjoying limited liability. It combines the mutual benefit character of a cooperative with the corporate structure of a company. Only primary producers or their institutions can be members of a Producer Company.

Objective

To incorporate a company owned by primary producers so they can collectively carry on production, processing, and marketing activities.

Characteristics

• Membership limited to primary producers or producer institutions
• Formed by at least ten individual producers or two producer institutions
• Limited liability with a corporate structure
• Deals with production, procurement, processing, and marketing of members' produce
• Shares are not freely transferable to non-members

Eligibility

• At least ten individuals who are producers, or two or more producer institutions
• Members engaged in an activity connected with primary produce
• Minimum of five directors as required for a producer company
• A registered office address in India
• Objects limited to the permitted producer company activities

Governing law

• Companies Act, 2013 (producer company provisions)
• Ministry of Corporate Affairs (MCA)
• Registrar of Companies (ROC)

The process

1. 1
   Obtain digital signatures and director identification

   The proposed directors obtain Digital Signature Certificates and Director Identification Numbers needed to file incorporation documents electronically.

2. 2
   Reserve the company name

   A unique name ending with Producer Company Limited is reserved through the MCA portal in line with the naming rules.

3. 3
   Prepare producer-specific documents

   The Memorandum and Articles of Association are drafted to reflect the permitted producer company objects and the mutual assistance principles.

4. 4
   File the incorporation application

   The SPICe+ incorporation form with member and director declarations is filed with the Registrar of Companies for approval and issue of the Certificate of Incorporation.

Documents required

• PAN and identity proof of members and directors
• Address proof of members and directors
• Proof of the producer status of members
• Proof of registered office and utility bill
• No Objection Certificate from the premises owner
• Digital Signature Certificates of directors

Benefits

• Collective strength for producers in procurement and marketing
• Limited liability protection for member producers
• Better bargaining power and access to markets
• Perpetual succession and a stable corporate structure
• Profits distributed among members based on their participation

Frequently asked questions