If you are contemplating starting a farmer-producing company or are already associated with one, you may have encountered certain dilemmas. Explore our comprehensive list of frequently asked questions (FAQs) related to farmer-producer companies to address any uncertainties you may have.
As agricultural knowledge continues to progress, an increasing number of small and marginal farmers are recognizing the advantages of forming farmer-producer companies. Witnessing the success of their counterparts has sparked curiosity among these farmers about initiating their businesses, leading to a plethora of frequently asked questions FAQs- Farmer producer company that can prove to be insightful.
FAQs – Farmer Producer Company
What is the minimum number of persons required to register a producer company?
A producer company, treated like a private limited company, can be registered with a minimum of two persons.
How are the liabilities of members in a producer company limited?
Members' liabilities are limited to the unpaid amount of shares held by them. The company operates with limited liabilities restricted only by the share capital.
What is the minimum paid-up authorized capital required for a producer company?
As per the new circular, a producer company must have a minimum paid-up authorized capital of Rs. 5 lakh.
Is there a limit on the maximum number of members in a producer company?
Unlike traditional private companies, producer companies can have any number of members, providing a more inclusive structure.
Can a producer company become a public limited company?
No, a producer company shall never become a public (or deemed public) limited company, ensuring stability and control.
Is members' equity in a producer company publicly traded?
Members' equity cannot be publicly traded but can only be transferred among members, preventing vulnerability to takeover by other companies or multinational corporations.
Why should one opt for a producer company?
Producer companies offer a statutory and regulatory framework that enables producer-owned enterprises to compete on a competitive footing. They facilitate the principles of mutual assistance and co-operation within a liberal regulatory framework.
What opportunities does a producer company provide to existing cooperative institutions?
Producer companies offer existing large multi-state cooperative institutions the voluntary opportunity to convert themselves into this new form, aligning with the principles of mutual assistance and co-operation.
What are the key objects and activities of a producer company as per the Companies Act?
The key activities of a producer company include production, harvesting, procurement, grading, marketing, processing, manufacturing, providing education, welfare activities, power generation, land and water resource management, insurance, and various allied or ancillary activities, including financing.
What is the historical background of producer companies in India?
Producer Companies were conceptualized to formalize and govern business activities related to agriculture, focusing on the challenges faced by farmers. Part IX A of the Companies Act, 1956, introduced in 2002, outlines provisions for producer companies, aiming to bring formalization and good governance to the agricultural sector.
Read more
