Producer Company Registration
Producer Company Registration in India is a special legal structure, specifically designed to empower farmers, agriculturists, and rural producers. A Producer Company enables primary producers to collectively manage their agricultural and post-harvest activities, ensuring better income, access to markets, and professional management.
It combines the benefits of a cooperative society and a private limited company, offering a formal platform for small producers to organize, share resources, and scale operations in a transparent and regulated manner.
A Producer Company is a company registered under Section 378A to 378ZU of the Companies Act, 2013 (earlier under Part IXA of the Companies Act, 1956), formed by a group of primary producers such as farmers, weavers, artisans, or fishermen for the purpose of carrying out activities related to production, harvesting, procurement, grading, pooling, handling, marketing, selling, or export of primary produce or importing goods or services for their benefit. It operates as a private limited company, but with the principles of a cooperative society, aiming to uplift producers through collective ownership and professional management.
Minimum Requirements to Register a Producer Company
Minimum 10 Members (Individuals):
At least 10 individual primary producers (e.g., farmers, artisans, etc.) are required.
All Members Must Be Primary Producers:
Every member should be engaged in activities related to primary produce (agriculture, forestry, fishing, animal husbandry, etc.).
Minimum Capital Requirement:
There is no fixed minimum capital prescribed by law, but Rs. 1 lakh is generally recommended as the authorized capital.
Directors:
- Minimum 5 Directors
- Maximum 15 Directors
Registered Office:
A valid registered office address is required for official communication.
Name of the Company:
The name must end with “Producer Company Limited”, but it is not considered a private limited company under company law, even though it operates like one.
Benefits of Forming a Producer Company
Limited Liability Protection
Members of a Producer Company enjoy limited liability, meaning their personal assets are not at risk in case of business losses or debts.
Separate Legal Identity
A Producer Company is a legally recognized entity, independent of its members. It can own property, enter contracts, and sue or be sued in its own name. This enhances credibility and long-term stability.
Access to Credit and Government Schemes
Producer Companies can more easily avail loans, grants, and subsidies from banks, NABARD, and government schemes aimed at promoting rural and agricultural development.
Pooling of Resources
Small and marginal farmers can pool their land, labor, and capital, enabling them to invest in better technology, infrastructure, and production processes that are otherwise unaffordable individually.
Higher Bargaining Power
Acting as a collective unit allows producers to negotiate better prices for both buying inputs (like seeds, fertilizers) and selling their produce, reducing exploitation by middlemen.
Profit Sharing Among Members
Members receive a share of the surplus profits as dividends and patronage bonuses, distributed based on their level of participation in the company’s activities.
Improved Supply Chain and Infrastructure
Producer Companies can invest in cold storage, warehouses, processing units, transportation, and packaging facilities, resulting in reduced post-harvest losses and better value for produce.
Capacity Building and Skill Development
These companies often organize training programs, workshops, and knowledge-sharing sessions to educate members on best practices, modern technology, and sustainable farming.
Market Linkages and Branding
Producer Companies can directly connect with markets, retailers, or even export agencies, eliminating multiple layers of intermediaries. This helps in better pricing, branding, and customer reach.
Tax Benefits and Incentives
In some states or under certain schemes, Producer Companies may be eligible for tax exemptions or lower tax rates, helping them reinvest more into the business and community.
Promotion of Sustainable Agriculture
With collective efforts, Producer Companies can adopt and promote environmentally friendly farming techniques and resource-efficient practices.
Democratic Management
The governance structure is democratic, where each member has a say in decision making irrespective of their shareholding, ensuring transparency and collective interest.
Rural Employment Generation
By encouraging processing, storage, and value-added services locally, Producer Companies create employment opportunities in rural areas and curb migration to cities.
Long-Term Socio-Economic Impact
Over time, Producer Companies help uplift the economic status of their members, promote financial literacy, and contribute to rural development.
Document required for producer company registration
From All Directors and Shareholders
Copy of PAN Card
Copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity Bill/Water Bill etc.
Copy of Voter's ID/Passport/Driver's License/Aadhaar Card
Passport-sized photograph of all directors and shareholders
Producer certificate of all Members/ Directors
Khasra/Khatauni of all Members/Directors
Mail id and Mobile No.
Shareholding details
For Proposed Registered Office
Copy of any Utility bill
Copy of NOC from the owner
PROCEDURE TO FORM PRODUCER COMPANY
Obtain Digital Signature Certificates (DSC)
All proposed directors and shareholders must obtain a Digital Signature Certificate to digitally sign documents.
Choose a Suitable Company Name
The name must include “Producer Company Limited.
Apply for name reservation via Spice+ Part A on the MCA portal.
Draft MOA and AOA
MOA (Memorandum of Association) outlines the main objectives (must align with producer activities).
AOA (Articles of Association) defines internal rules and regulations.
File Incorporation Documents with MCA
File SPICe+ PART B form along with the following:
- MOA & AOA
- Declaration by Directors (INC-9)
- Proof of Registered Office (Rent agreement/ownership proof + utility bill)
- PAN & Aadhar and Bank Statements/Utility Bills of subscribers/directors
- Producer Certificates of All shareholders/directors
- Khasra/Khatuani of all shareholders/directors
Certificate of Incorporation
Upon approval, the Registrar of Companies (RoC) issues a Certificate of Incorporation, along with a PAN and TAN.
Key Government Schemes and Grants for Producer Companies in India
Farmer Producer Companies (FPCs) play a crucial role in empowering small and marginal farmers by helping them access markets, capital, and technology. To strengthen FPCs, both central and state governments offer various schemes, grants, and financial support. Below are the top government initiatives designed to boost the growth and sustainability of FPCs in India.
SFAC Equity Grant Scheme
The Small Farmers’ Agribusiness Consortium (SFAC) offers an Equity Grant of up to ₹15 lakh per FPC. This grant helps Farmer Producer Companies increase their equity base, enhancing creditworthiness and improving access to institutional loans.
- Eligibility: Registered FPCs with valid Farmer Producer Company registration under MCA.
- Benefits: Improved financial strength and loan eligibility.
SFAC Credit Guarantee Fund Scheme
Under this collateral free loan guarantee scheme, FPCs can avail loans of up to ₹1 crore with a credit guarantee cover, reducing financial risks for lending institutions.
- Who Can Apply: Registered FPCs applying for bank credit for agribusiness projects.
Venture Capital Assistance (VCA) Scheme
Also managed by SFAC, the Venture Capital Assistance Scheme supports FPCs undertaking agribusiness projects by providing interest-free loans of up to 26% of the project cost or ₹50 lakh, whichever is lower.
- Purpose: To bridge the gap in project financing.
- Applicable Projects: Agro processing, storage, supply chain management, etc.
NABARD Grant and Support Schemes
The National Bank for Agriculture and Rural Development (NABARD) offers a range of support measures to Farmer Producer Companies, including grants and technical assistance for:
- FPC formation and incubation
- Capacity building and skill development
- Infrastructure and logistics support
- Working capital assistance
Note: Only FPCs registered with the Ministry of Corporate Affairs (MCA) are eligible.
10,000 FPO Formation and Promotion Scheme
Launched by the Government of India, this flagship scheme aims to form and support 10,000 Farmer Producer Organizations (FPOs) over five years. It is jointly implemented by SFAC, NABARD, and NCDC.
Frequently ask question
What is a producer company?
A Producer Company is a company formed by farmers, producers, or agriculturists to engage in activities related to agriculture, production, harvesting, marketing, and processing of farm goods.
Who can form a Producer Company?
Any 10 or more individuals (producers), or 2 or more producer institutions, or a combination of both, can form a Producer Company.
Under which law is a Producer Company registered?
A Producer Company is registered under Chapter XXIA (Sections 378A to 378ZU) of the Companies Act, 2013. These provisions are a continuation of Part IXA of the Companies Act, 1956, which earlier governed Producer Companies.
What is the minimum number of directors required?
A minimum of 5 directors are required to form a Producer Company.
What is the minimum capital requirement?
The law does not prescribe any minimum authorised capital for a Producer Company, but maintaining at least ₹1 lakh is recommended.
Is a Producer Company a private limited company?
Yes, it is treated as a private limited company but without using the term "Private Limited" in its name.
What are the main objectives of a Producer Company?
Its main objectives include production, procurement, harvesting, pooling, grading, marketing, selling, and export of primary produce.
Can non farmers become members of a Producer Company?
No, only producers or producer institutions can become members.
What are the documents required for registration?
Key documents include: -
- PAN & Aadhaar of members and directors
- Address proof
- Passport sized photos
- Digital Signature Certificates (DSC)
- Director Identification Number (DIN)
- MOA & AOA
- Registered office proof
- Producer Certificate of All Members/Directors
- Khasra/Khatauni of All Members/Directors
How long does it take to register a Producer Company?
It typically takes 10–15 working days, depending on document availability and government approvals.
Is DSC mandatory for all directors/shareholders?
Yes, all directors/shareholders must obtain a Digital Signature Certificate for online filing.
Can a Producer Company accept deposits?
Yes, it can accept deposits from its members, subject to conditions specified under the Act.
Can a Producer Company give loans to its members?
Yes, it can provide loans or advances to its producer members.
What are the annual compliance requirements?
It must file:
- Annual Returns with the Registrar of Companies (RoC)
- Income Tax Returns
- Hold regular board and general meetings
- Maintain statutory records and financial statements
Can a Producer Company be converted into any other company?
No, it cannot be converted into a public or private limited company.
Is GST registration required for a Producer Company?
Yes, if the turnover exceeds the prescribed limit or if involved in interstate supply, GST registration is required.
Can a Producer Company be formed for dairy or fishery business?
Yes, it can be formed for any primary produce including dairy, fishery, poultry, or forestry products.
What are the tax benefits for a Producer Company?
There are agricultural income tax exemptions, depending on the nature of income.
Who regulates Producer Companies?
Producer Companies are regulated by the Ministry of Corporate Affairs (MCA) and governed by the Companies Act provisions.
Is FDI allowed in a Producer Company?
Foreign Direct Investment (FDI) is allowed in agricultural activities under the automatic route, but subject to sectoral conditions.