A producer company is a hybrid of Company and the co-operative Society. The concept of Producer companies was introduced in the year 2002 under the companies Act, 1957. Basically the Producer company retains the format of co-operative society where the members are benefitted by mutual cooperation.
The objects of a producer company shall relate to production, marketing and sale of primary produce of the members. It also includes related ancillary products and services supporting the aforementioned activities in the field of primary produce. Also, it takes only 15-20 days to register a Producer company and the entire registration process is online based.
Producer Company : Meaning
A Producer company is a company registered under the Companies Act, 2013 which carries the following activities referred to in Section 581B of Companies Act, 1956.
1. Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import goods for their benefit.
2. Processing including preserving, drying, distilling, brewing, venting, canning and packaging of produce of its members
3. Manufacture, sale or supply of machinery, equipment or consumables mainly to its Members.
4. Providing education on the mutual assistance principles to its Members and others
5. Rendering technical services, consultancy services, training, research and development and all other activities for the promotion of interest of its members
6. Generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce.
7. Insurance of producers or their primary produce
8. Promoting techniques of mutuality and mutual assistance
9. Welfare measures or facilities for the benefit of Members as may be decided by the Board
10. Any other activity, ancillary or incidental to any of the activities referred to in above clauses which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner
11. Financing of procurement, processing, marketing or other activities specified in above clauses which include extending credit facilities or any other financial services to its members
Some of the key characteristics of a Producer Company are as below
1. Principles of mutual assistance and co-operation
The producer company works on the cardinal principles of cooperative societies that is principles of mutual assistance and cooperation with members and similar producer organizations.
2. Hybrid Model
A producer company combines the goodness of a cooperative enterprise and the vibrancy and efficiency of a company. It accommodates the unique elements of cooperative business with a regulatory framework similar to that of a private
limited company.
3. Shareholders/Members
Shareholders are the owners of the company. Minimum of 10 members or two producer organizations or their combinations can form a producer company. There no restriction on maximum number of members.
4. Directors
Directors are appointed by the shareholders to govern the affairs of the company. Minimum directors required is 5 and maximum permitted number of directors is 15.
