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Producer Company

Overview of Producer Company

A producer company can be define as a legally recognized body of farmers/ agriculturists. With the aim to improve the standard of their living and ensure a good status of their available support, incomes and profitability. Section 465(1) of the Companies Act, 2013 (‘Act’) provides that the provisions relating to a Producer Company under the Part IXA of the Companies Act, 1956 shall continue to apply. Thus, under the Act, a Producer Company can be forme by 10 individuals (or more). 2 institutions (or more) or by a combination of both (10 individuals and 2 institutions) having their business objective as specified under the Act.

Eligibility criteria for Producer Company in India

  1. A minimum of five directors are allowe in a Producer company.
  2. A minimum of ten members are allowe in a Producer company.
  3. A minimum of two institutions can come together to form a Producer company.
  4. A minimum capital of five lakh rupees is require for Producer company incorporation.
  5. A Producers company cannot be transforme into a public limited company.
  6. Every Producer Company must have at least five and not more than fifteen directors. Except for an Inter-State cooperative society, which is incorporate as a Producer Company, it has more than fifteen directors for one year from its incorporation.
  7. The Members who sign the Memorandum and the Articles of Association are designate the Board of Directors, not less than five.
  8. The election of directors will be conducte within a period of ninety days of the registration of the Producer Company.
  9. Every appointed director can hold their office for a period not less than one year and not exceeding five years.
  10. Every retired director is eligible for re-appointment as a director.
  11. The directors of the Board are electe or appointed by the existing members in the Annual General Meeting (AGM).
  12. The Board may co-opt one or more expert directors. Not exceeding one-fifth of the total number of directors. Or appoint any other person as an additional director for a period as the Board may deem fit. Provided that the expert directors shall not have the right to vote in the election of the Chairman.

Documents required to obtain an Producer Company

  • The first step is to obtain a Digital Signature Certificate (DSC) from all the directors. Documents required to obtain a DSC are:
  1. PAN Card of the Director
  2. Aadhaar Card of the Director
  3. Photo
  4. Email Id
  5. Contact Number
  • After obtaining the DSC, the next step is to obtain the Director Identification Number (DIN) by filing form DIR – 3 or SPICe+ Form along with a self-attested Identity proof, address proof, and a photo.
  • Then the name of the production company is to be finalize. For that, Form SPICe+ to the Registrar of Companies (ROC) is to be file by giving 2 names in the order of preference along with the significance of the names. The name shall have the words PRODUCER COMPANY at the end.
  • After the name is approved by the ROC, the following documents are to be prepared:
  1. The Memorandum of Association is to be drafte by incorporating all the objects that the company intends to follow.
  2. The Articles of Association is to be drafte containing all the by-laws of the company.
  3. An affidavit has to be signe by all the subscribers of the propose company declaring their legal competency to act as the subscribers.
  4. A utility bill and a NOC have to be taken from the owner whose address is to be used as the registere office of the company. If it is not owne, a lease agreement will be attache to the form.
  • All the drafted documents will be attache to Form SPICe+ and uploaded to the ROC website. On proper verification, the ROC will issue a Certificate of Incorporation and the company can start its business operations.
  • This form of establishment promotes the primary producer who is in a low-income group to optimize their income with collective bargaining and by selling the products directly to consumers.

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