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Producer Company

Minimum Paid-Up Capital for Producer Company

Check out the article to learn more about the concept of a producer company, how to register one, farmer producer companies, and other important details regarding producer companies under the Companies Act.

A Producer Company, sometimes known by its abbreviation PC, is a new form of legal company that exclusively consists of particular types of people, such as those that generate local goods such as farm goods, forest produce, craftsman goods, or any other type of output. Under section IX-A of the Indian Companies Act 1956, it was incorporated in 2003 as a legal body.

A producer company is a business that is managed by the law and is made up of farmers and agriculturalists. The government founded it to enhance the living standard, earnings, and productivity of Indian farmers and agricultural workers. Contact Vakilsearch if you need assistance with Producer Company Registration. They deal with several requests for producer company registration each month.

Benefits of Producer Company

A Producer Company is a legally registered corporate entity formed under the Companies Act, 2013, by producers or farmers who cooperate to produce agricultural products, such as harvesting, processing, packaging, and marketing. Here are some benefits of a Producer Company:

  • Separate Legal Status
  • Limited Liability Protection
  • Access to Government Schemes
  • Opportunity to improve its members’ income and living standards
  • Better access to technology, markets, and finance

Incorporation Process of Producer Company

The incorporation of a Producer Company can be treated similarly to make it a private company. Here are the steps involved in the incorporation process of a Producer Company:

  • Obtain a Digital Signature Certificate (DSC) for the proposed directors
  • Obtain Director Identification Number (DIN) for the proposed directors
  • Apply for the name of the company to the Registrar of Companies (ROC)
  • Draft the Memorandum of Association (MOA) and Articles of Association (AOA)
  • File the incorporation documents with the ROC
  • Obtain the Certificate of Incorporation from the ROC

It is important to consult legal counsel from Vakilsearch to ensure MCA-compliant producer company incorporation.

Different Tasks a Producer Company Performs

The producer firm is responsible for managing its members’ production. The following are a few key operations performed:

  • To inform the producer’s corporation’s members about the mutual help principle
  • Product processing for its members. Drying, brewing, canning, and packing are other preservation techniques used in the operation
  • Producing, selling, or providing its members with machinery, equipment, or other consumables
  • To carry out various activities to further the interests of the producer’s members, such as training, R&D, technical assistance, and consultation
  • Communication is linked to primary commodities, the transportation, generation, and distribution of electric power, and the regeneration of water and land resources
  • The board makes decisions on the welfare of the members
  • Marketing, handling financial transactions or doing other duties including offering credit facilities or providing further financial aid to fellow producers
  • To promote the employment of mutuality and assistance-based techniques; insurance for the producer and the main product
  • Additional initiatives that support producer members’ cooperation (or that are connected to the organisation’s basic objectives).

A Producer Company is a unique business entity that exclusively serves the interests of its farmer members, promoting collective farming and enhancing socio-economic conditions. Governed by the Companies Act, it enables farmers to pool resources, share knowledge, and collectively engage in agricultural activities. With a focus on increasing income and productivity, a Producer Company fosters a sense of community, ensuring equitable profit distribution among its members. By providing a platform for joint decision-making and access to modern farming practices, these companies contribute to the overall growth and sustainability of agriculture, empowering farmers and strengthening rural communities.

A Producer Company’s Minimum Share Capital

  • The producer company’s minimum authorised capital is ₹5 lakhs
  • According to the Memorandum of Association, the company’s authorised Capital for producer company may also be greater than ₹5 lakhs
  • The authorised share capital needs to be adequate to accomplish the goals listed in the memorandum
  • Realistic authorised share capital is necessary
  • The Producer Company’s minimum paid-up capital is ₹1 Lakh.
Empower farmers through seamless Farmer Producer Company Registration – streamline agri-business, boost rural economies! 🌾

Why Should You Register Your Producer Company?

The following are some of the main justifications for completing the production business registration:

Simple Management

By submitting quick documentation to the Registrar of Companies, the Board of Management of a producer business can be readily changed. The Board of Management of a producing firm is in charge of supervising its operations. 

Owning Real Estate

Producer corporations have the legal right to acquire, own, and dispose of property that is held in their name in other ways. The producer corporation is a business, hence the member has no right to any of the property that belongs to it.

Greater Reputation

Over unregistered producer organisations, producer corporations have greater credibility. Producer organisations are supervised and registered with the central government’s agencies. Additionally, the producer of the State government oversees organisations.

Distinct Legal Entity

Under the Act, producer corporations are recognised as legal entities. Therefore, a producer corporation has extensive legal authority and can both own property and incur debt. There is no obligation on the part of an organisation’s shareholders (Directors) to a production company’s debtors.

Persistent Existence

The business of a producer is a “permanent iteration.” It signifies that it has existed continuously or without interruption up until its formal dissolution. The death or removal of any member has no impact on production firms because they are separate legal entities. (Valium) Regardless of membership changes, it continues to be in operation.

Basic Conditions for Registration of a Producer Company

The production company may be incorporated using any of the following arrangements, under subsection (1) of section 581C of the Companies Act of 1956:

  • It takes more than two businesses to create a producer company
  • The producing firm must be formed with at least ten members
  • A combination of people and organisations is required for the registration of a private corporation
  • Furthermore, you need to fulfil the requirements listed below from the viewpoint
  • The production company must have a minimum of 5 directors and a maximum of 15 directors
  • Throughout the Financial Year, the production business is required to arrange at least four board meetings. Additionally, no more than three months should pass between two sessions. The capital of the fully paid-up shares must be at least ₹5 lakhs
  • A permanent CEO (Chief Executive Officer) is required to oversee the management and operations of the company
  • A production business might be thought of as having just equity share capital for producer company.

Why Pick a Producer Company?

  • Because producer companies can benefit from a variety of federal and state programs, including the National Food Security Mission and the Rashtriya Krishi Vikas Yojana monies
  • A grant of up to ₹10 lakhs is given to each Producer Company under the Equity Grant Scheme in order to increase the capital base
  • The Credit Guarantee Fund (CGF) insures 85% of bank loans made to Producer Companies. Regardless of the type of production company you want to form, Vakilsearch is the finest place to handle everything that happens during company registration. So don’t hesitate to call them and receive support that is guaranteed. By handling all the paperwork, they can even help make your interactions with the government as easy as possible.


In conclusion, by establishing a producer business in India, the producer company concept will ensure that the necessary regulations are followed as well as that the farmers and other organisations would profit to the fullest extent possible. Therefore, it is also a positive development for India’s agriculture industry.

The producer company is under no obligation to follow the Act’s requirements to become a public limited company. Just follow  Vakilsearch to get the most recent information about micro, small, and medium-sized enterprises (MSMEs), business advice, and a lot more.


1. Whether Producer Company is a Private Company or Public Company?

A Producer Company is a hybrid of a private and public company. It has the features of a private company, such as limited liability and a separate legal entity, and the features of a public company, such as the ability to have more than 200 members.

2. Whether the limit of 200 members is applicable to Producer Company?

No, the limit of 200 members is not applicable to Producer Companies. There is only a minimum requirement and no upper limit for the number of members in a Producer Company.

3. Who can be a member in a Producer Company?

Any individual or organization engaged in the production, harvesting, procurement, grading, pooling, handling, marketing, selling, or export of primary produce can become a member of a Producer Company. Primary produce refers to the produce of farmers, including raw material that is in its natural form.

4. What if a member of the producer company ceased to be a primary producer?

If a member of a Producer Company ceases to be a primary producer, they must inform the company within 30 days of the cessation. The company must then terminate the membership of the individual or organization.

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