What is Producer Company?

A Producer Company is a company, formed with an objective of production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit. Term “Produce” means things that have been produced or grown, especially by farming. This means that, a Producer Company deals primarily with agriculture and post-harvest processing activities.

Conditions to form a Producer Company:

• A Producer Company can be formed by 10 or more Individuals as producers.
• Two or more producer institutions or a combination of 10 or more producers and producer institutions.
• A minimum capital of Rs. 500,000 is required to incorporate a Producer Company.
• The share capital of a Producer Company shall consist of equity shares only.
• The shares held by a Member in a Producer Company, shall be in proportion to the backup of that company.
• There should be minimum 5 directors and maximum of 15 directors in aProducer Company.
• A full time chief executive (CEO) should be appointed by the board.
• There is no maximum limit of the members.
• The Producer Company in India cannot be deemed as a public company.
• There should be at-least four boards meetings every year and the meetings should not be held less than once every three months.

Over the period Producer Company has gained popularity due to the following:

• Co-operatives have largely been state promoted, with a focus on welfare rather than to do business on commercial lines and more State government intervention in the management of Co-operatives.
• Whereas Companies Act is central legislation comparatively more liberal and minimal government control in the management of the Company.
• A Producer Company is hybrid of Company and Co-operative Society.
• It combines the goodness of a co-operative enterprise and vibrancy and efficiency of a company and accommodates the unique elements of cooperative business with a regulatory framework similar to that of a company.

In India, a vast majority of farmers are marginal farmers with minimal land holdings individually. This restricts them to use the latest technologies in farming. This results in to lower economies of scale. A Producer Company is aimed at organizing a group of marginal farmers and ensuring larger economies of scale.

Why Bhavitra as Service Provider for Your Producer Company Registration?

Bhavitra.com is an eminent business platform and a progressive concept, which helps end-to-end incorporation, compliance, advisory, and management consultancy services to clients in India and abroad. Incorporating a Nidhi Company in India is easy, seamless, cheapest and quickest with Bhavitra.com! Apart from a Nidhi Company, Bhavitra.com also helps entrepreneurs with Private Limited Company Registration, Public Limited Company Registration, LLP Registration, HUF, One Person Company and Proprietorship Firm Registration easily. You may get in touch with our compliance manager on 09643203209 or email info@bhavitra.com for free consultation.