Producer company

Producer company - An Overview

A Producer Company is a special type of company created to promote the collective interests of farmers and primary producers. It enables farmers to organize themselves as a legal business entity, engage in production, harvesting, processing, marketing, exporting, and selling of agricultural produce—while enjoying the legal and financial protections of a registered company.

At VEXAGROW, we make the process of incorporating a Producer Company easy, affordable, and completely guided.

Benefits of Producer company

Separate Legal Entity

Like any company, a Producer Company is a distinct legal entity. It can own property, sue or be sued, and enter contracts in its own name. Any change in members or directors does not affect its existence.

Limited Liability

Members and producer institutions enjoy limited liability, meaning their personal assets are not at risk in case of losses or liabilities.

Special User Rights

The company may issue special rights to active members as per its Articles of Association (AoA), which can include privileges like additional produce supply or special distribution terms.

Member Benefits & Bonuses

Members receive returns based on the value of their produce. Bonus shares and patronage bonuses can be distributed from profits. Value can be withheld and paid later in cash or equity.

FAQ'S

Frequently Asked Questions

Find answers to some of the most common questions about our services. If you don’t see what you’re looking for, feel free to reach out to us.

1. What is a Producer Company?

A Producer Company is a company formed by farmers or producers to undertake activities related to production, harvesting, processing, procurement, grading, pooling, marketing, and selling of their produce. It is governed under Part IXA of the Companies Act, 1956.

2. Who can form a Producer Company in India?

A Producer Company can be formed by: 10 or more individual producers, or 2 or more producer institutions, or A combination of both All members must be involved in primary production like agriculture, horticulture, animal husbandry, or related activities.

3. What are the main benefits of a Producer Company?

Limited liability for members Separate legal identity Tax benefits under certain conditions Access to credit, subsidies, and government schemes Profit distribution in the form of bonus shares, patronage bonus, or dividend

4. What is the minimum capital required to start a Producer Company?

The minimum authorized capital required is ₹5 lakh. There is no fixed requirement for paid-up capital, but it must be mentioned in the Memorandum of Association (MoA).

Ready to Register Your Producer Company?

Let VEXAGROW help you build a strong, sustainable agricultural business with the legal and financial protections of a registered Producer Company.