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.

About Producer Company

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.

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’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.

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. 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.

Also Read:


Back to top button


Remove Adblocker Extension