Producer Company means a corporate body having objects or activities as specified under the Act. It consists of a group of people involved in the production, harvesting, procurement, grading, pooling, handling, marketing, selling and export of primary produce for mutual benefit. In a producer company, you can appoint agriculturist members and accept deposits in the form of RD/FD and provide them maturity as well as distribute loans to your farmer members and charge interest from them.
A group of 10 or more people or 2 or more producer institutions or a combination of 10 or more individuals and producer institutions can register as a producer company. when Producer Company have limited share capital, Minimum paid-up capital is Rupees 5 Lakhs only, Maximum 15 directors and Minimum 5 Directors, Minimum 10 individuals or 2 producer institutions, no limit on the maximum no. of members, The period of holding of office of the directors of a Producer Company shall range from 1 year to 5 years subject to the provisions made in the Article of Association, the maximum amount of return that can be paid by a producer company is determined by its Article of Association, The Producer company can under no situation become a deemed public company.
The Producer Company must deal primarily with the produce of its active Members and is allowed to carry on any of the following activities by itself or through other entities, on behalf of the members:
1. Processing including preserving, drying, distilling, brewing, canning and packaging of produce of its Members.
2. Manufacture, sale or supply of machinery, equipment or consumables mainly to its Members.
3. Providing education on the mutual assistance principles to its Members and others.
4. Rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members.
5. Generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communication relatable to primary produce.
6. Insurance of producers or their primary produce.
7. Promoting techniques of mutuality and mutual assistance.
8. Welfare measures or facilities for the benefit of Members as may be decided by the Board.
9. Any other activity, ancillary or incidental to any of the activities which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner.
10. Financing of procurement, processing, marketing or other activities which include extending of credit facilities or any other financial services to its Members.
