Producer Company Registration

Following activities can be performed by a Producer Company:-

• Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of members 
  Provided that the above activities shall be carried on by producer company either by itself or through other institution
• Processing including preserving, drying, distilling, brewing, venting, canning and packaging of produce
• Manufacture, supply of machinery, equipments or consumables to members
• Imparting education on mutual assistance principles to members
• Providing technical services, consultancy services, training, research and Development etc. for promoting interest of its members
• Insurance of producers and/or their primary produce
• Promotion of mutual assistance techniques
• Any other activities ancillary or incidental to above activities
• Extending credit facilities of financing for any of the above activities

The name of the Producer Company ends as Producer Company Limited which seems to be a Public Limited Company however as per section 581C of the Companies Act 1956, Producer Company registration shall be considered as body corporate which will under any circumstance not be deemed as Public Limited Company.

"Producer" or "Producer institution" can become a member of a Producer Company. Further, there is no limit for maximum number of members. A Producer Company can issue only equity shares to its members.

Yes, a foreign national can be appointed as a director after obtaining valid DIN. However, one director must be an Indian Citizen who is resident in India.

Producer Company is formed by the number of individuals who are primary producers and in need of timely financial assistance. Therefore, a special provision was passed as per companies act for loan sanctioning to the members of the producer company.

Financial assistance can be provided to the members of the Producer Company through the following:-

• Credit facility
  • The credit facility will be available to a member of the producer company for a period of not more than 6 months.

• Loans and advances
  • Loan and advances will be issued to the members against security for a period of not more than 7 years from the date of loan disbursement.

• NABARD (National Bank for Agriculture & Rural Development) Loan
  • To meet the requirement of the Producer Company, financial assistance is provided by the NABARD (National Bank for Agriculture & Rural Development). In the year 2011, Producer Organization Development Fund (PODF) of Rs. 50 Crore has been set up by the NABARD out of the NABARD operating surplus.

The active members of the producer company may enjoy special user rights, if provided in the AOA of the company. The company may issue appropriate instruments to active members in respect of such rights. The special use rights refer to any right relating to the supply of additional produce by the active Member or any other right relating to his produce.

Yes, a member of Producer Company can transfer his shares along with special rights, if any, after obtaining the approval of the BOD.

Within 3 months of becoming a member of the Producer Company, the member shall nominate a person in a specified manner to which shares will vest in case of death.

In case member ceased to be a primary producer, directors of the Producer Company will direct the surrender of shares at par value or the at the value determined by the directors together with special right attached if any. It will be done only when written notice is served by the member and an opportunity of being heard is given.

An internal audit of the Producer Company will be carried out by a CA in practice. Further, an annual audit report shall be submitted by auditor after proper examination of the books of accounts to the members of the producer company