Producer Company

• In a producer company, only primary producers or producer organization can become members
• Membership is acquired by purchase of shares in producer company
• A producer company can act through its members
• Members create the company
• Members act through their general meetings

• The minimum authorized capital of producer company is Rs.5 lakh
• The authorized capital of the company can be more than Rs. 5 lakhs indicated in the memorandum of association
• The authorized share capital should be sufficient for carrying out the objects mentioned in the memorandum.
• The authorized share capital should be realistic.
• The minimum paid up capital for producer company is Rs 1 lakh

Subject to the provisions of sections 581d of the act, every member shall have one vote and on the case of equality of votes, the chairman or person presiding shall have a casting vote except in the case of election of the chairman.

Yes! A producer company can accept deposits in the term of RD or RD and give on maturity as well as distribute loans to its members and charge reasonable interest from or on it.

A producer company is an organization registered with the minister of corporate affairs under govt. Of India and provisions of chapter ix of the companies act, 2013(18 of 2013)

Even though both, multistate cooperative societies and producer companies are formed as mutual benefit companies, multi state cooperative societies are registered with central registrar, whereas producer companies are incorporated under ministry of corporate affairs, govt of India.

• Voluntary and open membership
• Democratic control by membership
• Economic participation of members
• Autonomy and independence
• Training education and information
• Concern for the community

• A producer company is a hybrid between a private limited company and a cooperative society, thus enjoying the benefits of professional management of a private limited company as well as mutual benefits derived from a cooperative society.
• Ownership and membership of a producer company is held only by “primary producers” or “producer institution/s” and member’s equity cannot be traded. Hence, nobody can take over the company or deprive the primary producers of their organization.
• The clauses of private limited company shall be applicable to the producer companies except the clauses specified in producer company act from 581-a to 581-zl which make it from a normal private or limited company (refer the producer company act for details). this enables a professional framework for a producer company.
• The liability of the members is limited to the unpaid amount of the shares held by the. Hence the private assets of the members are safe from company losses.
• The minimum paid up capital being rs.1 lakh and minimum authorized capital being rs.5 lakh for a pc, it easy to mobilize the small amount.
• Minimum number of producers required to form a pc is 10 while there is no limit for maximum number of members and the membership can be increased as our feasibility and need. This helps even 10 individuals start a producer company which is easy.
• There cannot be any government or private equity stake in the producer companies which implies that pc cannot become a public or deemed public limited company.
• Hence, any government or other corporate threat is nonexistent in professional functioning of the company.
• The area of operation for a pc is the entire country giving flexibility to expand and do business in a free and professional manner.

• A producer company is to be a registered as the part IX A of Indian companies act 1956, reference section 465(1) of the companies act 2013. It is a must to register the company and non-registered entities are not given the benefit of the act.
• Registration of a producer company is a bit difficult, generally requiring the services of a consultant.
• The registration of a producer company is sometimes, time consuming process
• The members cannot transfer their shares freely.
• Getting a professional CEO at an affordable cost is little difficult.