Indian economy is an agricultural-centric economy. Around 60% of the population depends upon agricultural activities for their livelihood. But farmers have had a long struggle in India then the government of India made an expert committee, led by Y.K. Alagh (a business analyst) to investigate the matter related to the food. They introduced the Producer Companies concept to the Indian economy in 2002. Producer Company has helped primary producers gain access to input, credit, production technology, market, etc.
A producer company means a legally recognized body of farmers/ agriculturists. Its aim is to improve the norm of their living and guarantee a decent status of their accessible help, earnings and profitability. According to the Companies Act 1956, a Producer Company can be formed by 10 or more individual or 2 or more institutions or by a combination of both (10 individuals and 2 institutions) having their business objective as one of the following: Production, Harvesting, Grading, Pooling, Promoting, Selling, or Export the essential produce of the Members or import of merchandise or services
For their benefit.
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The objective of the Producer Company
- The main objective of the Producer Company is to provide the formation of co-operative business as companies and convert the existing co-operative business into companies.
- The main objective of the Producer Company is to produce, harvest, procurement, market, sell, import, or export the goods or services, etc. for their benefit either by itself or through another institution.
- Providing education to its members and others on the mutual assistance principles.
- Primary produce is related to the Generation, transmission, and distribution of power, revitalization of land and water assets, their utilization, protection, and interchanges.
- Producer Companies promote the techniques of mutuality and mutual assistance.
- Board decided the Welfare measures or facilities for the benefit of the members of their Company.
Incorporation of Producer Company
- Any 10 or more individuals or producers can form a production company but there is no upper Limit of members for the establishment of a Production Company.
- Any 2 or more institutions can form a production company.
- Incorporate a producer company is to require a minimum capital is Rs.5, 00,000.
- There should be a minimum of 5 directors or a maximum of 15 directors in a producer company.
- It can never be converted into a public company but converted into multi-state o-operative society.
The procedure for a producer company registration is almost similar to private limited company:
1. Obtain a digital signature certificate (DSC) and director’s identification number (DIN) from all the
Directors with self-attested copies of documents like PAN card, Aadhaar card, and contact details.
2. File the proposed company name in FORM-1A with the Registrar of the Company (ROC) of the respective state along with the prescribed fee.
3. Draft the necessary documents like the Memorandum of Association (MOA) to incorporate the company’s objects and the amount of share capital to be registered, Article of Association (AOA) to contain the company’s by-laws.
4. Filing of other documents like the statutory declaration in Form-1 declaring compliance of all the Documents and incidental matters regarding the formation of companies, an affidavit signed by the subscribers of the proposed company.
5. Director’s consent, utility bill, and NOC are also required of the producer company.
6. Once the Registrar is satisfied with the application and the required documents filed for incorporation of Producer Company, he will approve the same and issue certificate of incorporation.
Benefits of Registration of Producer Company
- The member of the company will receive a value for the product or products pooled and supplied as determined by the director. This amount will be distributed or given in cash or in form of distributing the equity shares.
- Members of the producer company can get bonus shares in proportion to the amount held.
- Members of the producer company are also eligible to get financial assistance through a credit office for a period not surpassing a half year.
- The surplus may be given as a patronage bonus.
Is Producer Company a public company?
Producer Company can never be changed over into a public organization however it very well may be changed over into a multi-state co-operative society.
Difference between private company and producer company:-
|Serial No.||Particulars||Producer Company||Private Company|
|1.||Minimum No. of Members||Any 10 or more individuals or 2 or more companies or Producer Institutions or their combinations||Any two or more individuals or companies|
|2.||Maximum number of members||No limit of maximum member||Maximum member of private company is 200.|
|3.||Number of director||At least 5 and not more than 15 directors in the Producer Company||At least two and not more than fifteen Directors in the Private Company|
|4.||Number of expert director||Total Number of additional or expert directors should not exceed one fifth of the total strength of the number of directors on the Board in the Producer Company||No such limit of expert director in the Private company|
|5.||Suspension of membership||A person suspension to be a member (a) he suspension to a Primary Producer (b) He has any other business interest which is in conflict with their business.||No specific provision for suspension of membership in the private company.|
Producer Company which 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. The Producer Company is to production, harvesting, procurement, grading, pooling, handling, marketing, selling, import or export of the goods or services for their benefit either by itself or through another institution. More population in India are depends upon the agriculture and farmer do more struggle for their livelihood then government can take steps for the farmers and introduced the Producer Company.
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