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Producer company

A producer company is a corporate body regulated by the provisions of Chapter IXA (Sections 581A to 581ZL) of the Companies Act, 1956 (CA, 2013 has no clear provision concerning producer companies and thus Chapter IXA of the Companies Act, 1956

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A business or corporate body having any object such as producing, harvesting, procurement, grading, pooling, handling, marketing, selling, exporting primary products or importing goods or services for their benefit is referred to as Producer Business The supplier identifies as any person engaged in any activity related to or relating to any primary product.

Primary product means

➲ Agricultural products (including animal husbandry, horticulture, floriculture, pisciculture, forestry, forestry, re-vegetation, bee-growing, and farming products) or any other primary operation or service that promotes the interests of farmers or consumers; or

➲ Manufacture of persons engaged in the manufacture of handicrafts and other cottages industry.

➲ Any product resulting from any of the above activities, including by-products of such products;

➲ Any product resulting from an ancillary activity which would assist or promote any of the above activities or any ancillary activities thereof;

➲ Any activity intended to increase or improve the quality of the production of something referred to in subclauses I to (iv);

A producer company is a corporate body regulated by the provisions of Chapter IXA (Sections 581A to 581ZL) of the Companies Act, 1956 (CA, 2013 has no clear provision concerning producer companies and thus Chapter IXA of the Companies Act, 1956 has not been repealed). Producer Company can only be formed to pursue items in compliance with Section 581B of the 1956 Company Act

Objects of Producer Company must carry

  • The objects of the Producer Company (specified in 581B of the act) shall relate to all or any of the following matters, namely : -

(a) Manufacture, processing, purchase, grading, pooling, storage, distribution, selling, the export of Members' primary products or imports of goods or services for their benefit: provided that the Producer Company is entitled to carry out any of the activities stated in this clause either by itself or by any other entity.;

(b) Processing including the storage, drying, distilling, brewing, venting, canning and packaging of its Members' products;

(c) Manufacture, selling or supply of machinery or consumables, primarily to its Members

(d) educating to its member and others on the mutual assistance principles

(e) Providing services to its member like technical services, consultancy services, training, research and development and all other activities for the promotion of the

(f) Generation, transmission, and distribution of power, revitalization of land and water resources, their use, conservation and communications relatable to primary produce;

(g) Providing insurance to producers or their primary produce;

(h) Promoting techniques of mutuality and mutual assistance ;

(i) Facilitate facilities for the benefit of Members as may be decided by the Board ;

(j) any other activity, ancillary or incidental to any of the activities referred to in clauses (a) to (i) or other activities which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner ; 

  • Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section.

    The producer company's members may carry out these operations on their own or through other organisations.

  • Produce processing includes canning, drying, brewing, distilling, vinting, and packaging.
  • Retailing  or manufacturing of machinery or equipment
  • Educating its members and others about the values of mutual help
  • Providing technical assistance, consulting, training, R&D, and other services in order to further the interests of its members
  • Power production, distribution, and transmission; revitalization of water and land resources; their utilisation, conservation, and communications pertaining to primary produce
  • Producers' or their primary produce's insurance
  • promoting mutuality and cooperation strategies
  • If the board so decides, members may benefit from welfare programmes or facilities.
  • Other actions that could support the mutuality tenets

Pre-Incorporation Checklist

  • Any ten or more producers (individuals) can join together to create a company, but there is no upper limit on membership.
  • Or, a producer company can be created by any two or more production institutions.
  • For the incorporation of a producer company a minimum capital of Rs. 500,000 is required.
  • A producer company should have at least 5 directors (a maximum of 15).


➲ A producer company is a registered private company.

➲ Producer Company shall be regulated by Chapter IXA of Companies Act, 1956.

➲ Voting rights for each member in the producer company shall be based on one single vote.

➲ No person who has any commercial interest that conflicts with the Producer Company's business shall become a member of that Company.

➲ The Company's name ends with "Producer Company Limited" which is set out in the Memorandum.

➲ The producer company's AOA and MOA shall be prepared in compliance with the requirements laid down in section 581F and 581G.

➲ The quorum at a General Meeting shall be one-fourth of the total membership.

➲ A production company's share capital shall consist only of equity shares.

➲ This can never be converted into a public company but it can be converted into a multi-state cooperative society.

Procedure and Documentation

Firstly members and directors are required to obtain DSC for this:


➲ Photograph

➲ Aadhar or bank statement

➲ Email id

➲ Mobile number

For Incorporation Process:

➲ ID proof of proposed Directors and Subscribers (any one of them)

  • Passport
  • Driving license
  • Voters ID card

➲ Address proof of proposed Directors and Subscribers (any one of them)

  • Electricity bill of residing address
  • Mobile bill
  • Telephone bill
  • Bank statement

➲ Address proof for the proposed company

  • Proof of Office address (Conveyance/ Lease deed/Rent Agreement etc. along with rent receipts)
  • Copy of Utility bill (electricity bill, gas bill, Mobile bill, etc)(not older than 2 months)


Incorporation of Producer Company;

  • It can be incorporated through SPICe
  • Scanned MOA & AOA should be attached to the SPICe, as E-MOA and E-AOA shall not be applicable for producer companies.
  • Maximum 3 DIN can be filed with SPICe, for allotting rest of DIN file DIR-3

Other docs needed to be attached with SPICe:

  • All proposed director’s DIR-2
  • Duly signed MOA & AOA
  • List of subscriber duly signed 

Difference between producer company and Private Limited Company


Producer company

Private limited company

Minimum number of member

Ten or more individuals or two or more producer institution of their combination can form a producer company

Minimum of two member individual or companies can form a private limited

Maximum number of member

NO limited

Maximum can be 200

Objectives of the company

Can carry the business with Specific objects specified in 581B of the act

Can incorporate with lawful objects


A producer company ends with “producer company limited”

“Private Limited Company” (PVT LTD)

Cessation of members

A person can cease to be a member of the producer company if:

  1. He ceases to be a primary producer
  2. He has any other business which conflict with business of producer company

No such provision for the cessation of membership

Number of directors

Minimum 5

Minimum 2

Vacation of office of director

Director shall vacate the office on the grounds led down under section 581A of the act

Director will vacate his office on the ground led down under section 167of the act

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