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Meaning of Producer Company

A producer company is a company registered under the Companies Act 2013 that deals primarily with agriculture and post-harvest processing activities. It has the objective of production, harvesting, procurement, grading, pooling, handling, marketing, selling, and export of primary produce of its Members or import of goods or services for their benefit. Primary produce includes produce of farmers, animal husbandry, horticulture, forestry, and products of handloom, handicraft or cottage industries. A producer company can be incorporated by 10 or more individual producers, 2 or more producer institutions, or a combination of both. It functions similar to a private limited company but must comply with specific provisions for producer companies in the Companies Act.

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39 views1 page

Meaning of Producer Company

A producer company is a company registered under the Companies Act 2013 that deals primarily with agriculture and post-harvest processing activities. It has the objective of production, harvesting, procurement, grading, pooling, handling, marketing, selling, and export of primary produce of its Members or import of goods or services for their benefit. Primary produce includes produce of farmers, animal husbandry, horticulture, forestry, and products of handloom, handicraft or cottage industries. A producer company can be incorporated by 10 or more individual producers, 2 or more producer institutions, or a combination of both. It functions similar to a private limited company but must comply with specific provisions for producer companies in the Companies Act.

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chthakor
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Meaning of Producer Company :

A producer company is basically a body corporate registered as Producer Company under Companies Act,
1956 and shall carry on or relate to any of following activities classified broadly:- (a) production, harvesting,
processing, procurement, grading, pooling, handling, marketing, selling, export of *primary produce of the
Members or import of goods or services for their benefit : (b) rendering technical services, consultancy services,
training, education, research and development and all other activities for the promotion of the interests of its
Members; (c) generation, transmission and distribution of power, revitalization of land and water resources,
their use, conservation and communications relatable to primary produce; (d) promoting mutual assistance,
welfare measures, financial services, insurance of producers or their primary produce; Producer Company is a
company registered under the Companies Act, 2013, which has the objective of production, harvesting,
procurement, grading, pooling, handling, marketing, selling, and export of primary produce of the Members or
import of goods or services for their benefit. Produce are things that have been produced or grown, especially by
farming. Therefore, a Producer Company deals primarily with agriculture and post-harvest processing activities.

*Primary produce has been defined as a produce of farmers arising from agriculture including animal
husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, re-vegetation, bee raising
and farming plantation products: produce of persons engaged in hand-loom, handicraft and other cottage
industries: by - products of such products; and products arising out of ancillary industries.

Salient Provisions of Companies Act relating to Producer


Companies
Incorporation
Any of the following combination of producers can incorporate a producer company:

• ten or more producers (individuals); or • two or more producer institutions; or • combination of the above two
(10+2).

Registration
(a) In a Producer Company, only persons engaged in an activity connected with, or related to, primary produce
can participate in the ownership. The members have necessarily to be primary producers. (b) These companies
shall be termed as “Companies with Limited Liability” and the liability of the members will be limited to the
amount, if any, unpaid on the shares. (c) The name of the company shall end with the words "Producer
Company Limited" (d) On registration, the producer company shall become as if it is a private limited
company for the purpose of application of law and administration of the company(however it shall comply with
the specific provisions of part IXA). (e) The maximum number of 50 members is not applicable to these
companies.
Share Capital and Voting Rights
(i) The share capital of a Producer Company shall consist of equity shares only. (ii) Members' equity cannot be
publicly traded but only transferred. (iii) Voting when membership is

• only of individuals then voting rights shall be based on a single vote for every member. • only of producer
institutions then voting rights on the basis of their participation. • combination of both individuals and
producer institutions then voting rights shall be based on a single vote for every member.

Management

• Every producer company is to have at least five and not more than 15 directors. • A full time chief
executive should be appointed by the board and shall be entrusted with substantial powers of management as
the board may determine.

Reserves

• Every producer company has to maintain a general reserve in every financial year and in case there are not
sufficient funds in any year for such transfer, the shortfall has to be made up by members' contribution in
proportion to their *patronage in the business.

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