A Producer Company is a company that is formed with the objective of engaging in activities related to production, harvesting, procurement, grading, pooling, handling, marketing, selling, or export of primary produce of its members. The term “produce” refers to things that have been produced or grown, particularly in the context of farming. Therefore, a Producer Company primarily deals with agriculture and post-harvest processing activities.

To form a Producer Company, it requires either 10 or more individuals as producers or a combination of two or more producer institutions and 10 or more producers or producer institutions. A minimum capital of Rs. 500,000 is required for incorporation, and the share capital of the company should consist of equity shares only. The shareholding of members should be in proportion to their participation in the company. The company should have a minimum of 5 directors and a maximum of 15 directors, and a full-time chief executive (CEO) should be appointed by the board. There is no maximum limit on the number of members, and the company cannot be deemed as a public company.

One of the reasons for the popularity of Producer Companies in India is the relatively more liberal and business-friendly environment provided by the Companies Act compared to the cooperative sector, which often faces greater government intervention. Producer Companies combine the benefits of a cooperative enterprise and the efficiency of a company, allowing for the unique characteristics of cooperative business within a regulatory framework similar to that of a company.

In India, the majority of farmers are marginal farmers with small landholdings, which limits their access to modern farming technologies and economies of scale. Producer Companies aim to organize groups of marginal farmers and enable them to achieve larger economies of scale.

At Simplemyfiling, we have a team of highly qualified professionals, including chartered accountants, company secretaries, lawyers, and business administrators, who can assist you with your Producer Company registration. We offer a range of services, including startup advisory, secretarial compliance services, PAN/TAN application, DIN registration, GST registration, trademark registration, and GST/income tax return filing. For a free consultation and to learn more about our services, you can contact our compliance manager at 9178663478 or email us at simplemyfiling@gmail.com.