Producer Company Registration in India

Producer Company Registration in India


Producer Company is a new legal entity that includes certain categories like., agricultural produce (farmers) which may further include organic farming, poultry business, forest produce, artisan products, or where the members are primary producers. Producer Company can do any one or more activities as are given under section 581B of the companies act. It has been conceptualized, taking into the considerations of agriculturists { Our farmers} (termed as ‘Producers’) Who is a Producer? The producer is someone who is any person involved in any activity which is connected with or relatable to any primary product. for example farmers or other primary producers.


Part nine A was included ln the Companies Act, 1956 by amending the Companies Act, 1956, in 2002 which consists of Chapters I to XII, covering Sections 581A to 581 ZT, these special 46 provisions are still in existence and deals with the producer companies. the most important thing we need to note down is these special 46 provisions shall prevail over the other provisions of the companies act in case any contradiction arises with the other general provisions of the same act.

A producer company carries on various activities which are mentioned in section 581B of Companies Act 1956 like -

  • Procurement

  • Harvesting

  • Production 

  • It may include electricity generation, banking activity.

  • Drying, brewing, etc

  • Fertilizer manufacturing, supply of machinery, equipment, or consumables mainly to its members.

  • Rendering various technical services, consulting services, training, research and development, other activities for the promotion of the interest of its members,

  • Conservation and communications relatable to primary producers, transmission, generation and distribution of power, revitalization of land and water resources, their uses,

  • Insurance of producers or their primary produce, etc

Producer Company- Private Company or Public Company?

The name of every producer company contains the suffix '' producer company limited '' it may cause confusion in the mind whether it is a public company? It is a private company only.

As per clause five of section 581C of Companies Act, 1956, on registration the Producer Company shall become a body corporate as if it is a Private Company and shall not under any circumstances be considered a Public Company.


  • Number of members- 10 or more individuals, each of them should be a producer, or

  • Combination of  10 or more producer corporations or individuals or

  • 2 or more producer institutions are involved.

  • Number of Directors in Producer Company -- at least 5 directors but not more than 15 directors allowed.

  • Minimum Paid-up capital of Rs. 5 lakh required.

  • Voting rights in this type of company are aligned with the principle of { one man-one vote }regardless of shareholding in the producer Companies of their members.


It is not just earning profits but to helping every member of such institutions and sharing profits between members. There are various challenges faced by producers like climate issues, technological advancements, labor issues, policy changes, etc. These challenges were considered by the policymakers and implemented through the various schemes which led to some kind of formalization into the agricultural sector.

Formation of a producer company –

  • Any two or more producer organizations or any ten or more persons in which each one is a producer or there may be a combination of both i.e., Ten or more persons and producer organizations having their objectives specified in section 581B and also complying with various requirements of this part may incorporate a company as a producer company.

  • The incorporation of the producer company depends on the satisfaction of the registrar. If he is satisfied that all the requirements of the act have complied then he shall, within 30 days of the document submission register the memorandum and issue a certificate of incorporation.

  • Producer Organization has the option to reimburse its promoters all other d costs which are associated with the promotion and registration of the company including registration fees, legal fees, the printing of a memorandum and articles, and other payments.

  • On registration under sub-section one, the Producer Company shall become a body corporate as if it is a private limited company to which the provisions contained in this Part apply.

Registration of producer company

Necessary documents

Step 1: Apply  Digital Signature Certificate (DSC) and Director’s Identification Number (DIN) from all the Directors with self-attested copies of documents like PAN, Aadhaar card, and contact details. The Director’s Aadhaar Card Photograph, Email Id, Contact Number.

Step 2: We have to fill the Proposed company name in FORM-1A with the Registrar of the company(roc) of the respective state along with the mentioned fee. Once the name is available, the ROC informs about the availability of the name.

Step 3: Then We have to Draft the necessary documents like Memorandum of Association to incorporate the objects of the company and the amount of share capital to be registered, Article of association in which (internal rules and regulations of the company is to be written)

Step 4: This step requires Filing other important documents like Statutory declaration in Form-1 declaring compliance of all and incidental matters regarding the formation of companies; affidavit signed by the subscribers of the proposed company.

Step 5: Then the final  Certificate will be issued after which the Company shall become a corporate body as if it is a private limited company. It cannot become a public limited company.

Benefits of producer companies

  • Financial assistance- Loans and advances-Government helps these companies with necessary finances. The government has also set up NABARD for this purpose A producer organization development fund of  Rs.50 crore has been set up by NABARD to fulfill the financial needs of the producers. This type of credit facility is very helpful for these companies.

  • Every member of such type of company will receive a value for the product. in which they deal.

  • Members of such type of co. can get bonus shares in the proportion to the amount held.

  • Tax benefits-100% deduction is applicable to the companies with an annual turnover of Rs 100 crore and companies earning profit are not taxed

  • Good governance.

  • Easy management


This concept of forming a producer company is intended to benefit farmers and various other groups. It requires handholding support from the government In the initial stages. Once it grows it cumulatively helps various sections of the society.

eStartIndia is one of the leading online platforms for providing company registration services at an affordable cost.

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Shefali Srivastav
Uttar Pradesh
L.LM from Amity University, Noida

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