A producer company is a company of primary producers, such as farmers, formed under Chapter XXIA of the Companies Act, 2013 to jointly produce, process, procure and market their produce. It needs at least 10 individual producers or two producer institutions, at least five directors, and a name ending with Producer Company Limited. Registration is done through SPICe+.
Permitted activities
- Production, harvesting, procurement, grading and pooling of produce
- Processing, marketing and export
- Supply of inputs, machinery and services to members
- Training, insurance and financial services for members
Registration process
- Mobilise at least 10 producer members and choose directors.
- Obtain DSCs and reserve the name.
- File SPICe+ with MoA, AoA and member details.
- Receive the certificate of incorporation.
Benefits and support
Producer companies get collective bargaining, better market access and eligibility for government schemes such as equity grants and credit guarantees for FPOs, and support through implementing agencies.
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- Board meetings and AGM
- Audit, AOC-4 and MGT-7
- Maintain member records and patronage
Frequently asked questions
Can non-farmers be members of a producer company?
Membership is for primary producers or producer institutions. Persons who are not producers cannot become members, though experts can be co-opted as directors within limits.
Can a producer company pay dividends?
Returns to members are primarily in the form of patronage bonus linked to their business with the company, along with limited dividend on shares, as provided in the law and articles.
Can shares of a producer company be transferred?
Shares are generally transferable only to active members, with board approval, which keeps control with producers.
How is an FPO different from a cooperative?
An FPO registered as a producer company follows company law, with professional management and ROC oversight, while cooperatives are governed by state cooperative laws and registrars.
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