What is a Producer Company?

A Producer Company is a company registered under Section 378A to 378ZU of the Companies Act, 2013, which primarily deals with production, harvesting, procurement, grading, pooling, handling, marketing, selling, or export of primary produce of the members or import of goods or services for their benefit.

It is a special type of private limited company formed by farmers, producers, or people engaged in agriculture, horticulture, dairy, livestock, fisheries, and related fields.

Key Features of a Producer Company

• Minimum 10 Members (individual producers)
• Up to 200 Members (like a private limited company)
• No maximum capital limit
• Limited liability
• Perpetual succession
• Separate legal entity
• One person = one vote (irrespective of shareholding)

Benefits of Registering a Producer Company

1. Legal Recognition: Producer Company gives farmers and producers a legal identity and structure to operate collectively.
2. Tax Benefits: Agricultural income is exempt from tax under certain conditions.
3. Better Credit Access: Easy to obtain loans and financial assistance from NABARD, banks, and government schemes.
4. Market Support: Enhances bargaining power and market access.
5. Limited Liability: Members’ liability is limited to the unpaid amount on shares.
6. Profit Sharing: Profits are distributed to members as patronage bonus, dividend, or limited returns.

Who Can Form a Producer Company?

To form a Producer Company, the following combinations are allowed:

• Minimum 10 individuals, each being a producer
• Or, 2 or more producer institutions
• Or, a combination of both

A producer refers to anyone engaged in any activity related to primary produce such as:

• Farming
• Animal husbandry
• Horticulture
• Forestry
• Beekeeping
• Poultry
• Handicrafts
• Dairy
• Fisheries

Activities Permitted for a Producer Company

A registered Producer Company can engage in the following:

• Production, processing, packaging, and selling of produce
• Manufacture and sale of agricultural equipment
• Import/export of goods and services for member benefit
• Training and education for mutual assistance principles
• Technical services, consultancy, and R&D

Documents Required for Producer Company Registration

For Directors and Members:

• PAN Card
• Aadhaar Card or Voter ID
• Passport-size photograph
• Address proof (bank statement, utility bill not older than 2 months)

For Registered Office:

• Rent agreement or sale deed
• NOC from the owner
• Utility bill (electricity, water, gas bill)

Other Documents:

• Digital Signature Certificate (DSC)
• Director Identification Number (DIN)
• Memorandum of Association (MoA)
• Articles of Association (AoA)

Step-by-Step Process for Producer Company Registration

Here is the simplified process to register a Producer Company in India:

Step 1: Obtain DSC and DIN

All proposed directors must get their Digital Signature Certificate (DSC) and Director Identification Number (DIN).

Step 2: Name Approval

Apply for name reservation through the SPICe+ Part A form on the MCA portal. The name should end with “Producer Company Limited”.

Step 3: File SPICe+ Part B

Submit incorporation documents including MoA, AoA, declarations, identity, and address proofs of members.

Step 4: Company Registration

Once the Registrar of Companies (ROC) verifies all documents, the Certificate of Incorporation (COI) is issued.

Step 5: Apply for PAN & TAN

Apply for PAN and TAN of the company simultaneously through the SPICe+ form.

Step 6: Open Bank Account

Open a current bank account in the name of the company and deposit the initial capital.

Legal Compliances After Registration

After incorporation, a Producer Company must comply with the following:

• Conduct the first board meeting within 30 days
• Maintain proper books of accounts
• File Annual Return and Financial Statements
• Hold annual general meetings (AGMs)
• Tax compliance under the Income Tax Act
• GST registration (if applicable)
• Filing of ROC forms such as ADT-1, MGT-7, AOC-4

Author: Nyaya Setu Legal Association
Disclaimer: This article is intended for informational purposes only and does not constitute legal advice. For specific legal assistance regarding Producer Company Registration, please consult us for more option.