Producer Company Registration

Producer Company Registration

Producer Company Registration in India

Producer Company” means a body corporate having objects or activities specified in section 581B of Companies Act 1956 [reference section 465(1) of Companies Act 2013] and registered as Producer Company under this Act. 

Producer Company can only do business of production, procurement, harvesting, grading, marketing, trading of the primary produce with the help pf its members and financing them for these activities which includes extending credit facilities also. It cannot deal with the public directly and can only work with its members.

On registration, the Producer Company shall become a body corporate as if it is a private limited company without any limit to the number of Members thereof, and the Producer Company shall not, under any circumstance, whatsoever, become or be deemed to become a public limited

Producer Company Registeration

Figure: Number of producer companies registered, by year, all-India, 2003–19, in numbers

Source: Review of Agrarian Studies

85% of India’s farmers are small and marginal producers, cultivating small plots that generate low returns. Bringing them together into producer enterprises is expected to give them advantages of scale that they lack as individual producers, and bring in cost efficiencies in production and marketing, better price realization through aggregation and value addition, and risk reduction.

Eligibility for Producer Company Registration


Producer Company can be set up by any 10 or more individuals, each of them being a producer or any 2 or more Producer institutions, or a combination of ten or more individuals and Producer institutions.


Every Producer Company shall have at least five and not more than fifteen directors. In the case of an inter-State co-operative society incorporated as a Producer Company, such company may have more than fifteen directors for a period of one year from the date of its incorporation as a Producer Company.


The minimum capital requirement for Producer Company registration is Rs. 5 lakh.

Documents required for Producer Company Registration

Directors and Shareholders (Identity Proof)

  • PAN Card
  • Proof of Identity (Voter ID / Passport / Driving License /Passport) (any one)

Directors and Shareholders (Residential Proof)

Bank statement /Electricity/ Telephone / Mobile bill) (not older than two months) (any one)

Producer Proof

Extracts of Agricultural Land or certificate from District Tahsildar this is additional requirement (proof of farming will differ state to state)

Registered Office Proof

  • Conveyance/ Lease deed/Rent Agreement etc. along with rent receipts (any one)
  • Copy of the utility bills (Telephone/Gas/Electricity bill) (not older than two months) (any one)
  • NOC from Landlord

Procedure of Producer Company Registration

Producer Company Registration (Procedure Chart)

Reserve Name of Company

The first step in incorporation is to reserve/approve the name of company. The proposed name selected should do not contain any word which is prohibited under Companies Act, 2013. An approved name is valid for a period of 20 days from the date of approval, for a new company. It is permitted to apply for two proposed names and one Resubmission (RSUB) while Reserving Unique Names for companies through the RUN web service.

Take DSC of Directors and Subscribers

The application for registration filed online and it is mandatory required to be signed by the director and all subscribers of the company. So Digital Signature Certificate (DSC) is required to be taken for the directors and shareholder of the company, who is required to sign the e-form for registration before filing incorporation application for the company. Photo, ID and Address proof is required to along with DSC application form for issuance of DSC.

Preparation of Documents and E-Application

After getting the name and DSC, internally we prepare the documents and e-application for purpose of submission to Registrar of Companies.

Submission of E-Application to ROC

Application for registration/incorporation of producer company is made to Registrar of Companies (ROC) along Memorandum and Article of Associations etc.

Follow up & Get Certificate of Registration, PAN & TAN

ROC then scrutinizes the e-application for incorporation of company. If ROC finds the e-application and related documents in order, issues Certificate of Registration/Incorporation of producer company. After receiving the certificate of Incorporation the producer company is set to start its function. PAN and TAN are simultaneously applied alongwith company registration e-forms and are issued along with Certificate of Incorporation and it is also mentions into Certificate of Incorporation.

Frequently Asked Questions (FAQs) to Producer Company Registration

Who are Active Member?

“Active Member” means a member who fulfils the quantum and period of patronage of the Producer Company as may be required by the articles

What is Limited Return?

“Limited Return” means the maximum dividend as may be specified by the articles

Who are Member?

“Member” means a person or Producer institution (whether incorporated or not) admitted as a Member of a Producer
Company and who retains the qualifications necessary for continuance as such.

Who does Producer means?

“Producer” means any person engaged in any activity connected with or relatable to any primary produce.

What does Producer Company means?

“Producer Company” means a body corporate having objects or activities specified in section 581B and registered as Producer Company under this Act.

What does Producer institution means?

“Producer institution” means a Producer Company or any other institution having only producer or producers or Producer Company or Producer Companies as its member whether incorporated or not having any of the objects referred to in section 581B and which agrees to make use of the services of the Producer Company or Producer Companies as provided in its articles.

Who are Officer?

“Officer” includes any director or Chief Executive or Secretary or any person in accordance with whose directions or instructions part or whole of the business of the Producer Company is carried on.

What is meaning of “Patronage”?

“Patronage” means the use of services offered by the Producer Company to its Members by participation in its business activities.

What is meaning of “Patronage bonus”?

“Patronage bonus” means payments made by a Producer Company out of its surplus income to the Members in proportion to their respective patronage.

What is meaning of Primary Produce?

“Primary produce” means-

  • produce of farmers, arising from agriculture (including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, re-vegetation, bee raising and farming plantation products), or from any other primary activity or service which promotes the interest of the farmers or consumers ; or
  • produce of persons engaged in handloom, handicraft and other cottage industries ;
  • any product resulting from any of the above activities, including by-products of such products ;
  • any product resulting from an ancillary activity that would assist or promote any of the aforesaid activities or anything ancillary thereto;
  • any activity which is intended to increase the production of anything referred to in sub-clauses (i) to (iv) or improve the quality thereof.

What does “withheld price” means?

“withheld price” means part of the price due and payable for goods supplied by any Member to the Producer Company ; and as withheld by the Producer Company for payment on a subsequent date.

What are objects of producer company?

The objects of the Producer Company shall relate to all or any of the following matters, namely –

  • production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit. However, the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution.
  • processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members.
  • manufacture, sale or supply of machinery, equipment or consumables mainly to its Members.
  • 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.
  • generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce ; (g) insurance of producers or their primary produce.
  • promoting techniques of mutuality and mutual assistance.
  • welfare measures or facilities for the benefit of Members as may be decided by the Board.
  • any other activity, ancillary or incidental to any of the activities referred referred above or other activities which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner ;
  • financing of procurement, processing, marketing or other activities specified above which include extending of credit facilities or any other financial services to its Members.

What are benefits to members in producer company?

  • Subject to provisions made in articles, every Member shall initially receive only such value for the produce or products pooled and supplied as the Board of Producer Company may determine, and the withheld price may be disbursed later in cash or in kind or by allotment of equity shares, in proportion to the produce supplied to the Producer Company during the financial year to such extent and in such manner and subject to such conditions as may be decided by the Board.
  • Every Member shall, on the share capital contributed, receive only a limited return. However, every such Member may be allotted bonus shares in accordance with the provisions contained in section 581ZJ.
  • The surplus if any, remaining after making provision for payment of limited return and reserves referred to in section 581ZI, may be disbursed as patronage bonus, amongst the Members, in proportion to their participation in the business of the Producer Company, either in cash or by way of allotment of equity shares, or both, as may be decided by the Members at the general meeting

What are effect of incorporation of producer company?

Every shareholder of the inter-State co-operative society immediately before the date of registration of Producer Company (hereafter referred to as the transformation date) shall be deemed to be registered on and from that date as a shareholder of the Producer Company to the extent of the face value of the shares held by such shareholder.

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