Quick Summary
Producer Company is a special corporate entity formed by 10 or more producers (farmers) to engage in production, harvesting, procurement, grading, pooling, handling, marketing, selling, or export of primary produce.
Producer Company is governed by Part IXA of the Companies Act, 1956 (as continued in 2013 Act). It is formed by primary producers (farmers, artisans, weavers) to improve their standard of living and ensure better income for their produce.
Eligibility - Who Can Form
- 10 or more producers (individuals)
- 2 or more producer institutions
- Combination of 10+ producers and institutions
- Only natural persons engaged in primary production
Objects of Producer Company
- Production, harvesting, procurement, grading
- Pooling, handling, marketing, selling
- Export of primary produce
- Processing including preserving, drying, distilling
- Supplying machinery, equipment, seeds
- Providing education and training
- Generating, transmitting and distributing power
Benefits
- Limited liability protection
- Tax benefits (similar to cooperative societies)
- Can receive government subsidies
- Separate legal entity
- Perpetual succession
Key Points
- For primary producers (farmers)
- Minimum 10 producers required
- Implements Part IXA of Companies Act
- Limited liability protection
- Tax benefits available