Producer Companies —— (2)

In this series on Producer Company we bring the legal aspect of formation. 


The concept of Producer company was introduced in May 2002 by introducing a new Part IXA in the Companies Act. The provisions from S. 581A – 581ZT were based on YK Alagh Committee’s recommendations.

Who can form a Producer company?

  • Any 10 or more individuals, each being a producer relating to primary produce can form a Producer company.
  • Any 2 or more producer institutions (an institution primarily having only
    ‘producers of primary produce’ as members) 
  • Any combination of individuals or producer institutions mentioned above.

For which Primary Produce a Producer company can be formed?

  • These activities generally would include agriculture sector (including animal
    husbandry, horticulture, floriculture, pisciculture, viticulture, forestry,
    forest products, re-vegetation, bee-raising).
  • Any primary activity which promotes the interests of the farmers.
  • Produce of persons engaged in handloom, handicraft and other cottage industries.
  • Any product / by product resulting from any of the above activities.
  • Any other activity which enhances the production of the above-mentioned

What is the Status of a Producer Company?

  •  It is a company registered under Companies Act and will have ‘Producer Company Limited’ included in its name.
  • Since it is a limited liability company, the liability of members would be
    limited to the shareholding amount. 
  • Registrar of Companies Act will be the registration authority.
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