Producer Company Registration
A producer company is thus a hybrid between a private limited company and a cooperative society. It combines the goodness of a cooperative enterprise and the vibrancy and efficiency of a company. It accommodates the unique elements of cooperative business with a regulatory framework similar to that of a private limited company.
What is a Producer Company?
Producer Company means a body corporate having objects or activities as specified and registered as producer company under the act. It is a group of people involved in the production of primary produce or having one or more objectives relating to primary produce. In a producer company, you can make agriculturist members and accept deposits in form of RD/FD and provide them maturity as well as distribute loans to your farmer members and charge interest from them.
Main objective of the producer company is to facilitate the formation of co-operative business as companies and to make it possible to convert existing co-operative business into companies.
The Board of a producer company can be easily changed by filing simple forms with the Registrar of Companies. The Board controls the activities of the producer company.
Separate Legal entity
A producer company is a legal entity and a juristic person established under the Act. Therefore, a producer company has wide legal capacity and can own property and also incur debts.
Producer Company enjoy better avenues for borrowing of funds when compared to other forms of business such as sole proprietorship and partnership.
NABARD has taken up the cause of supporting and to meet the needs of Producer Companies.t set up a Rs. 50 crore Producer Organisation Development Fund (PODF) in 2011
A producer company has ‘perpetual succession’, that is uninterrupted existence until it is legally dissolved. A producer company is unaffected by the death or other departure of any member.
Personal assets of the shareholders will not be at risk, in the event of the company facing financial distress. Liability of the shareholder is limited to the unpaid amount on his shareholding.
Prerequisites for Incorporation of Producer Company
Number of Producers
10 or more Producers / 2 or more Producer Institutions can form a Producer Company But there is no upper limit on the number of members
Minimum Required Capital
A minimum capital of Rs. 500,000 is required to incorporate a producer company.
Number of Directors
There should be minimum 5 directors (maximum of 15) in a producer company.
What are the Documents required for Formation of Producer Company?