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Producer Company

Reasons Why You Should Register Your Producer Company Online

A farmer producer company is a group of farmers that combine to increase their revenue and improve their standard of living. Registering for a farmer producer company has now become easy and trouble-free due to digitalisation.

It is well known that more than half of India’s people depend on agriculture as their livelihood. About 58% of India’s population has agriculture as their primary source of livelihood. So much so that agriculture’s contribution to the Indian GDP increased from 17.8% in 2019-20 to 19.9% in 2020-21.

However, Indian farmers continue to lack structure and access to the most modern tools and technologies for producing their crops. Not having adequate resources causes crop failure, causing farmers to suffer severe losses.

In India, more than 15% of farmers commit suicide each year, and The Indian government has established a team of experts to investigate this issue. As a result, the Farmer Producer Company was formed.

A farmer producer company is a group of farmers that combine to increase their revenue and improve their standard of living. In India, a Producer Company can be established with just 10 members and 2 institutions. The registration of a Producer Company requires a minimum of Rs. 5 lakh in the capital.

Following are Some Features You Need to Know About the Producer Company

  • With the aid of its members, the Producer Company can only conduct business in production, procurement, harvesting, grading, pooling, marketing, and dealing with the primary produce.
  • It can also finance its members’ participation in these activities by providing credit facilities.
  • It can only operate with its members and cannot engage directly with the general public. However, with a little paperwork and a simple procedure, one can add members to a Producer Company. 
  • Each producer receives a portion of the profits, with the remaining funds going to the reserves or share capital.
  • Additionally, the only type of organisation available to register a lending firm in India without RBI approval is Producer Company Registration.
  • It is created by a group of farmers for their agricultural or non-agricultural operations.
  • It is a registered agency and a legal entity.
  • The company’s producers are the company’s shareholders.
  • The corporation conducts business in connection with the production of primary. The corporation conducts business in connection with the production of primary produce.
  • It attends to the needs of its members and seeks to further the interests of its producer members.

Producer Company is a cross between a company and a cooperative society. It combines the qualities of a cooperative organisation with the vitality and efficiency of a company, and it takes into account the distinctive features of cooperative business with a regulatory framework comparable to that of a firm.

But why is it important to register your farmer producer company online?

Benefits of Farmer Producer Company Registration

  • Limited Liability

When you register as a producer company, it provides you with a separate legal entity, which means that you and the members of the company will have a separate identity from the company in the eyes of the law, therefore, providing you with the benefit of limited liability.

  • More Credibility

A producer company provides farmers with more legitimacy than other unregistered farmer or agriculturist associations.

  • Acceptance of Deposits

A registered business may accept ‘one-time’ or ‘recurring deposits’ as deposits. In addition, they have the ability to provide loans to farmers and members at very affordable interest rates.

  • Property ownership

A properly registered farmer company has the authority to buy, sell, or own real estate under its own name. Additionally, it has the right to accept deposits or grant loans to its agriculturalist members at relatively low-interest rates.

  • Easy management and registration

The process of becoming a producer company is straightforward, and the firm can make changes to the Board of Management by submitting a few straightforward forms to the relevant ROC.

All the benefits mentioned above of Farmer Producer Company Registration can be easily accessible to you by registering online with the help of many legal firms that specialise in registering and managing a Producer Company in India.

Learn more about Benefits Available To A Producer Company

Benefits for the Members of the Farmer Producer Company

  • The most significant benefit is that after a decision has been made by the directors of the relevant producer company, the members of the Producer Company receive the agreed-upon sum for the produce that has been pooled and supplied. 

The remaining sum is distributed to the company’s shareholders as cash or equity shares.

  • Members of the producer company may receive a surplus as a patronage bonus (after making provisions for the payment of the limited return and reserves). Patronage bonuses are the distribution of surplus income among the production company’s members according to the volume of their patronage.

Patronage, on the other hand, refers to a member’s involvement in commercial activity.

  • Members of the producing firm are also eligible for bonus shares, which are distributed in the same ratio as equity shares.

Mandatory Documents

  • Photo and Pan
  • PAN and images of the current directors and shareholders
  • ID evidence for directors, members, and shareholders includes an Aadhar card, a driver’s licence, a passport, and a voters ID.
  • Address Verification: Bank Statement, Utility Bills (Landline, Mobile, and Electric)
  • Producer Assurance
  • Any additional evidence identifying a person as a serving member, such as a sarpanch letter, an income tax return (ITR) showing agricultural income, or evidence of registered address, utility bills, a lease, and a letter from the owner stating that there are no objections

To fulfil all these mandatory document requirements is not easy. That is why people prefer to register their Producer company in online mode, which makes the process smooth and trouble-free.


Due to a lack of facilities and fragmented landholdings, the majority of Indian farmers struggle to achieve the best value for their primary crop. However, producer firms in India assist them in utilising economies of scale to obtain inputs at the lowest costs, adopting new technologies, having simple access to loans and financing, establishing direct links to the market, and developing post-harvest processing facilities.

Farmer Producer Company is a group of farmers who band together to enhance their quality of life and better their way of life. The establishment of a farmer-producer company gives the business a distinct legal identity and offers the company a number of tax cuts and advantages. In addition, it offers members a number of advantages, such as bonuses, simple access to low-interest loans, and many more.

Moreover, due to digitalisation, registering for a farmer producer company has now become easy and trouble-free. Many companies specialise in registering and managing producer company. Vakilsearch being one of them, is a platform that offers services to meet the legal needs of Producer Company in India. If you are thinking about registering a Farmer Producer Company, reach out to Vakilsearch and make your process hustle-free!

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