Producer Company Registration

What is Producer Company?

A Producer Company is formed by 10 or more individuals or two or more institutions dealing in agricultural produces or post-harvest processing activities. Thus, a producer company is a legally recognized cluster of agriculturists/farmers which aims to improve their incomes, statuses of their available support and profitability, and the standard of their living.

Advantages of Producer Company Registration

The main and outstanding advantages of producer company registration are the following:

  • A producer company enjoys a separate legal entity, and offers the facilities of limited liability and perpetuity.
  • Producer companies offer greater credibility as compared to that offered by unregistered organizations of agriculturists/farmers.
  • Changes in the Board of Management of a producer company can swiftly be made just through filing few simple forms with the ROC concerned.
  • Only a duly registered producer company is entitled to sell or own a property in its own name.
  • A registered producer company is fully entitled to accept deposits from or give loans to its agriculturist members, at reasonable rates of interest.

Reason to register Producer Company

  • Separate Legal Entity
  • Easy Management
  • Uninterrupted Existance
  • Owning Property
  • Better Credibility

What are the Requisite Documents required for registering producer company?

For the purpose of producer company incorporation, the following documents are required:

  • 1 (One) Passport size photograph of each director
  • Identity proof of each director - PAN Card (Mandatory in case of Indian National, If foreign National then Passport is mandatory), duly notarised and attested by an Indian Embassy
  • Residence Proof of each director (any of the following)
  • Driving License
  • Passport
  • Telephone Bill
  • Electricity Bill
  • Bank Statement (Attested by bank manager)
  • AADHAR card
  • Stability Proof: Utility Bills of not older than 2 months or current bank statement (Compulsory)
  • Consent to act as Directors (Affidavit on stamp paper of Rs. 10/-)
  • Proof of address in which the company will get itself registered.

Registration of Producer Company

a. For incorporation of producer companies, Form INC-7 shall be used.

b. MOA and AOA will be drafted as per regulations.

c. Affidavit from Subscribers and First Directors In Inc 9

d. Consent to act as director in form – DIR-2.

e. Payment of prescribed registration and filing fee

f. Certificate of Incorporation: The ROC will verify the documents and thereafter register the company by issuing a Certificate of Incorporation, which brings the company into existence as a legal entity.

Objects of Producer Company (Sec 581B)

1. The objects of the Producer Company shall relate to all or any of the following matters, namely: -

a. Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit. Provided that the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution;

b. Processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members ;

c. Manufacture, sale or supply of machinery, equipment or consumables mainly to its Members ;

d. Providing education on the mutual assistance principles to its Members and others;

e. Rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members ;

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

g. Insurance of producers or their primary produce;

h. Promoting techniques of mutuality and mutual assistance;

i. welfare measures or 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;

k. Financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) which include extending of credit facilities or any other financial services to its Members.

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

Audit & Internal Audit Requirements

Producer Companies shall carry out an internal audit of its accounts, at regular intervals in accordance with its articles of association and such an audit shall be carried on by a Chartered Accountant.

The auditor shall make an annual audit report to the members of the company on the accounts examined by him. An unnecessary stipulation is that “without prejudice to the concerned sections in the Act,” the auditors of producer companies have to specially report on some additional items such as debts due and bad debts, verification of cash balances and securities, details of assets and liabilities, loans extended to directors and details of donations and subscriptions.

Basic Setup Requirements for Producer Company

1. Any of the following combination of producers can incorporate a producer company:

a. ten or more individuals, each of them being a producer; or

b. two or more producer institutions; or

c. combination of the above two (10+2)

2. Shall have minimum 5 directors and maximum 15 directors. The limit of maximum number of members is not applicable to these Companies.

3. Minimum initial paid-up authorized capital – 5 lakh

4. A registered office address.

5. Director Identification Number (DIN) and Digital Signature Certificate (DSC) for Directors.

6. DSC of shareholders.

What is Producer Company?

A Producer Company is thus a body corporate having an object that is one or all of the following: production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit.

What is Producer Company Registration?

To register a Producer Company in India, the following members in any of the combination is necessary:

1.Ten or more individuals, each of them being a producer; or

2.Two or more producer institutions; or

3.A combination of ten or more individuals and producer institutions

What are Benefits of Producer companies?


• Members will be eligible to receive bonus shares in proportion to the shares held by them


• It is important to note that the IT Act does not essentially provide any special benefits or exemptions to producer companies by definition. But subject to the kind of agricultural activity carried out, certain tax benefits can be availed.


• Loans and advances, against security mentioned in articles to any Member, repayable within a period exceeding three months but not exceeding seven years from the date of disbursement if such loans or advances.


To offer a statutory and regulatory framework that creates the potential for producer-owned enterprises to compete with other enterprises on a competitive footing.

• To provide for the method of formation and registration of “Producer Companies” which, inter alia carries the principles of “mutual assistance” and “Co-operation” within the more liberal regulatory framework afforded by the company law with suitable adaptation.