pri Overview of Producer Company under New Companies Act, 2013 Overview of Producer Company under New Companies Act, 2013


About more than 85% Farmers in India are mostly small and marginal with landholdings of less than 2 hectares. Indian farmers to adopt the latest technologies it is not viable as This fragmentation in farmers and farmlands leads to disorganization. Economies of scale can be unlocked and the livelihood of farmers can be improved day by day only by the organization of these farmers into producer companies. Thus the concept of Producer Company Registration is aimed at empowering farmers by creating clusters of farmers organized as a Producer Company.


1) All the members of Producer company are always eligible for financial assistance by way of credit facility but the period not exceeding more than 6 months.

2) Every member of the Producer Company will receive a value for the product or products pooled and supplied as determined by the Director. The amount will be distributed in cash or by allotment of equity shares. This may be subject to the conditions of the Board.

3) All Members of the producer company get the bonus shares in the same proportion of the shares held by them.

4) The additional amount that may be remaining (after providing provision for payment of limited return and reserves) may be distributed as bonus to the members of the producer company.

producer-Company changing farmers life


1. To carry on business of production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of Members or import of goods or services for their benefit. Provided that the company may carry on any of the activities specified in this clause either by itself or through other institutions

2. To carry on business of processing the produce of Members (i.e.; preserving, drying, distilling, brewing, vinting, canning and packaging, branding and brand development of produce of Members)

3. To carry on business of manufacture, sale or supply of machinery, equipment or consumables to its Members

4. To carry on business of providing education on the mutual assistance principles to its Members.

5. To carry on business of rendering services such as technical, consultancy, training, research and development.

6. To carry on business of generation, transmission and distribution of power, revitalization of land and water resources.

7. To carry on business of insurance of producers or their primary produce.

8. To run welfare measures or facilities for the benefit of members.

9. To promote mutuality and mutual assistance

10. Carrying on any other activity, ancillary or incidental to any of the activities referred to in above clauses

11. To carry on business of financing of procurement, processing, marketing or other activities specified in above clauses (i.e; extending credit facilities or any other financial services to its members)


Producer Company” means a body corporate having objects or activities specified in section 581B and registered as Producer Company under the Companies Act, 1956.

The provisions of Part IX A of the Companies Act, 1956 shall be applicable mutatis mutandis to a Producer Company in a manner as if the Companies Act, 1956 has not been repealed until a special Act is enacted for Producer Companies ( 1st Proviso to Section 465(1))

As per section 465(1), there is no difference regarding legal provisions of Producer companies under old Companies Act 1956 and New Companies Act 2013. Earlier under old company law CHAPTER IXA of Companies Act 1956, governed the set-up and operations of Producer companies. Chapter IXA covered section 581A to 581ZL. Now under New company law CHAPTER XXIA of Companies Act 2013, governed the set-up and operations of Producer companies. Chapter XXIA covered section 378A to 378ZU. When we compare both the laws section by sections, it reveals that there is no significant changes made under new company law.  Therefore law pertains to producer companies remained same even under New companies Act 2013.

Documents required for producer company registration:

Producer Company Registration requires two or more producer institutions ten or more producers (individuals); or ten or more producers (individuals); or combination thereof.

The members have necessarily to be primary producers.

  • PAN Card/ Passport/ Election ID Card of all the directors and shareholders.
  • The latest Bank Statement is not older than 2 months.
  • Voter’s ID/Driver’s License/passport of all the directors and shareholders.
  • Passport-sized photographs of all directors and shareholders.
  • Copy of any Utility bill as residential proof.
  • In case of the rented property a scanned copy of Rent agreement along with NOC from the owner.

Author Bio

Qualification: CA in Practice
Company: Arpit Gupta & Co.
Location: Lucknow, Uttar Pradesh, India
Member Since: 14 Jun 2021 | Total Posts: 2
Arpit Gupta is founder partner of Arpit Gupta & Co. He is also a fellow member ICAI & ICWAI and practicing since more than a decade and his core area of practice is corporate law, international taxation, representing cross-border tax disputes, getting FDI Approvals, setting up subsidiaries, View Full Profile

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July 2021