What is a producer company

A Producer Company is a group of people involved in the production of primary produce or having one or more goals relating to primary produce. In a producer company, you can make agriculturist members and accept deposits in form of FD/RD and provide them maturity as well as distribute loans to your farmer members and charge interest from them. A group of ten/more people or two/more producer institutions or a combination of ten/more individuals and producer institutions can register as a Producer Company on the condition that:

  • Producer Company can have only equity share capital
  • The minimum paid-up capital necessary for formation of a Producer Company is Rupees Five Lakhs only
  • Minimum ten individuals or two producer institutions or any combination of ten individuals and producer institutions are required for incorporating a Producer Company.
  • There is no limit on the maximum number of members of a Producer Company
  • Minimum five directors are necessary for a Producer Company
  • A Producer Company can have a maximum of fifteen directors
  • The period of holding of office of the directors of a Producer Company shall range from one year to five years subject to the provisions made in the Articles of Association.
  • The first directors should be elected by the subscribers to the memorandum and articles of association within ninety days from the date of producer company registration.
  • The directors other than the first directors shall be elected or appointed by the members in their AGM or annual general body meeting.
  • The Producer Company can under no situtation become a deemed public company
  • In case of Producer Company comprising only of individual members or combination of individual members and producer institutions, then the voting rights shall be considered on one vote per member
  • In case of Producer Company consisting only of producer institutions, then the voting rights shall be considered on the participation in the business of the Producer Company in the previous year.
  • The Producer company can restrict the voting rights to only its active members on the condition that it is authorized by its Articles of Association
  • The Board of Directors of the Producer Company shall meet at least one in every three months and at least four such meetings shall be held in every year
  • The First AGM or annual general meeting of the Producer Company shall be held within ninety days from the date of its incorporation.
  • A Producer Company is required to appoint a full-time secretary if its average annual turnover exceeds Rupees Five Crores in each of the three consecutive financial years
  • The maximum amount of dividend (limited return) that can be paid by a Producer Company is determined by its Articles of Association.
Activities which you can do in producer company

Farming is the core business of India. Infact, 72.4 percent of India reside in villages. Producer includes farmers, agriculturist people who cultivate wheat, cereals, rice, grain etc. Basically producer is the term used for people who actually produce something. The producer carry on the business of production, procurement, storage, processing, packing, distribution, marketing, selling and trading of all agricultural, non agricultural, horticulture, vegetables, medicinal, spices, crops, producer poultry, apiculture, sericulture, lac culture their processed products and other allied products, seed, fertilizers, pesticides, farm machineries and related extension & consultancy services for ultimate benefits to the members of the company. They can undertake organic production programme, processing, certification, export and trade business (as per National & International norms & standards) of all agricultural, Horticultural Vegetables Crops & Daily products their forms, by the members and non-members producers of the company. It will include import & hire of goods and services in all forms, for the benefit of members. Further, to manufacture, producer, process and sell or supply of all kinds of seeds(certified/TL), fertilizers, agricultural inputs, farm machineries, equipment or consumables preferably producer companyto the members and non-members producers/farmers, private, governments or public organization for the supreme interest of all members under any formal or informal agreements. Read more on producer company

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