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Producer Company, The agricultural industry is the backbone of the Indian economy. Nearly 60% of India’s population depends on agricultural activities for their livelihood. The concept of Producer Company in India was introduced for registering a Producer Company, under the Companies Act, 2013. A Producer Company is an amalgamation of a Private Limited Company and a Cooperative society. It is a legally formed group of agriculturists/farmers who objects to improve their income status and the standard of their living and ensure a good status of their available support. The objective of the Producer Company is production, harvesting, procurement, grading, pooling, handling, marketing, selling, the export of primary production of the members or import of goods or services for their benefit, provided that the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution.
** Director: – Section 2 (34) of the Act prescribed that “director” means a director appointed to the Board of a company. A director is a person appointed to perform the duties and functions of the director of a company under the provisions of the Companies Act, 2013.
** Member: – Section 41 of the Act Defines that ” member” the subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration, shall be entered as members in its register of members.
A Producer Company has a separate legal existence than that of its member and is liable to the full extent of its assets.
The Liability of a member of a Producer Company is limited to the extent of the company’s assets and does not fall on his/her assets like houses, cars, personal savings, etc.
A Registered Producer Company has greater goodwill and standing in the market in comparison to the unregistered organization of farmers.
Dispute Relating to producers companies are to be settled by conciliation or arbitration under the Arbitration & Conciliation Act, 1996 as if the parties to the dispute have consented in writing to such procedure.
A registered producer company can accept deposits in the form of fixed or recurring deposits.
A producer company can easily disburse loans to the members and farmers at a reasonable interest rate.