Producer company
A producer company is a limited-liability company of primary producers, formed to pool, process, and market their produce. Company Suggestion incorporates it under the Companies Act, 2013. The name ends with Producer Company Limited.
What is a producer company?
The objects stay with the produce of the members. They include production, harvesting, procurement, grading, pooling, handling, marketing, selling, and export of that primary produce, and the import of goods or services for the members’ benefit. Processing, machinery supplied mainly to members, technical services, insurance of the produce, and credit for those activities can sit alongside.
It is a separate legal person. A member’s liability is limited to the unpaid amount on that member’s shares. It is not a public company, and it is not a partnership.
Who can be a member?
Membership is limited to people who produce.
- At least 10 individuals, each a primary producer, or at least 2 producer institutions, or a combination.
- At least 5 directors, and not more than 15.
- Equity shares only. A share moves to another primary producer with the board’s approval.
- After a limited return and reserves, a surplus may be paid as a patronage bonus in proportion to each member’s business with the company, not merely in proportion to shares held.
Which papers does incorporation need?
The file identifies the producers and the place of business.
- PAN, Aadhaar, a photograph, and a digital signature of each subscriber and director
- Proof that the individual subscribers are primary producers
- The registered office: ownership or rent papers, a utility bill not older than two months, and a no-objection if the place is rented
- The proposed name, ending with Producer Company Limited
What are the incorporation steps?
Company Suggestion incorporates the company in four steps.
- The producers and the objects are confirmed against the producer-company chapter.
- The name is reserved and SPICe+ is filed with at least 5 directors.
- The certificate of incorporation is issued with PAN and TAN.
- The board meets at least once every three months. Financial statements go in AOC-4, and the annual return in MGT-7.
Frequently asked questions
4 questions cover the rules that decide this registration.
How many members and directors are required?
At least 10 individual primary producers, or at least 2 producer institutions, or a combination of the two. The board has at least 5 directors and not more than 15.
Is there a minimum capital of ₹5 lakh?
No. The Companies Act does not fix a minimum paid-up capital for a producer company. The members decide the share capital in the memorandum.
Is a producer company a public company?
No. Membership is not capped, but the company is not treated as a public company. Only a primary producer can hold its equity, and a transfer needs the board’s approval.
How often does the board meet?
At least once in every three months, and at least four times a year. A general meeting is called with at least 14 days’ notice.