Producer Company Entity:

A Producer Company (PC) may be a comparatively new legal entity that features solely bound classes of person’s viz., agricultural manufacture, forest manufacture, craftsman merchandise, or the other native manufacture, wherever the members are primary producers. Producer Company as a legal entity was enacted in 2003 as per section IX-A of the Indian firms Act 1956.

Formally, an organization registered as a Producer Company beneath the businesses Act, 1956 shall relate to any of the subsequent activities classified broadly:-

  • Production, harvesting, processing, acquisition, grading, Pooling, handling, marketing, selling, export of primary manufacture of the Members or product or services for his or her profit.
  • Rendering technical services, practice services, training, education, analysis and development and every one different activities for the interest of the members
  • Generation, transmission, and distribution of power, advance of land and water resources, their use, conservation and communications associated with primary manufacture.
  • Promoting mutual help, welfare measures, monetary services, insurance of manufacturers or their primary produce.

Who can incorporate a producer company?

Any of the subsequent combination of producers will incorporate a producer company:

  • 10 or a lot of producers (individuals); or
  • 2 or a lot of producer institutions; or
  • A mixture of the on top of (10+2)
  • Solely persons WHO are engaged in or connected to primary production activity will be members and homeowners of a Producer Company.
  • These corporations are termed as “Companies with restricted Liability” and also the liability of the members are going to be restricted to the number, if any, unpaid on the shares.
  • The name of the corporate has got to finish with “Producer Company Limited”
  • For the target of implementation of law and administration of the corporate, the Producer Company is treated as a private ltd.

The new concept of Producer Company:

The new concept of producer corporations relies on the recommendations of A knowledgeable committee LED by noted economic expert, Y. K. Alagh. The committee was asked (a) to border a legislation that will change incorporation of cooperatives as corporations and conversion of existing cooperatives into corporations and (b) to confirm that the planned legislation accommodated the distinctive components of cooperative business with a regulative framework like that of corporations.

The new kind is termed as Producer Company', to point that solely bound classes of persons will participate within the possession of such firms. The members have essentially to be primary producers,’ that is, persons engaged in associate activity connected with, or associated with, primary turn out.

What is primary turn out? In terms of the Act it’s a product of farmers arising from agriculture as well as farming, gardening, flower gardening, pisciculture, culture, forestry, forest product, re-vegetation, bee raising and farming plantation products: turn out of persons engaged in loom, handicraft and alternative house industries: by – product of such product; and products arising out of auxiliary industries.