Producer Companies

The introduction of Producer Companies by Companies (Amendment Act, 2002 with effect from 06.02.2003 provides for corporate governance of members joining together to achieve specified objects. The registration of a Producer Company enables incorporation of co-operatives as companies and conversion of existing co-operatives into companies on optional basis.

Producer Company means a body corporate registered under the Companies Act, 1956 as a Producer Company having the following objects:

1) Production, harvesting, procurement, grading, pooling, handling, marketing selling export of primary produce of the members or import of goods or services for their benefits.
2) Processing including preserving, drying, distilling, brewing, venting, canning, and packaging of produce of its members.
3) Manufacture , sale or supply of machinery equipment or consumables mainly to its members;
4) Providing education on the mutual assistance principles to its members and others
5) Rendering technical services, consultancy services, training research and development and all other activities for the promotion of the Interest of its members.
6) Generation, transmission and distribution of power revitalization of land and water resources their use, conservation and communications relatable to primary produce;
7) Insurance of producers or their primary produce;
8) Promoting techniques of mutuality and mutual assistance;
9) Welfare measures or facility for the benefit of members as may be decided by the Board;
10) Any other activity, ancillary or incidental to any of the above activities or other activities which may promote the principles of mutuality and mutual assistance amongst the members in any other manner;
11) Financing of procurement processing marketing or other above specified activities which include extending of credit facilities or any other financial services to its members.

Every producer company shall deal primarily with the produce of its active members for carrying out any of the above objects. An active member is a member who fulfills the quantum and period of patronage of the producer company as may be required by the articles. Producer means any person engaged in any activity connected with a relatable to any primary produce. A member means a person or producer institution (whether incorporated or not) admitted as member of a producer company and who retains the qualification necessary for continuance as such. Producer institution means Producer Company or any other institution having only producers or producer companies as its members whether incorporated or not having any of the above objects and which agrees to make use of the services of the producer companies as provided in its articles.

Patronage means the use of services offered by the producer company to its members by participation in its business activities. Patronage bonus is the payment made by a producer company out of its surplus income to the members in proportion to their respective patronage.

Primary produce:

1) Primary produce means – produce of farmers arising from agricultural (including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products re-vegetation, bee raising and farming plantation products), or from any other primary activity or service which promotes the interest of the farmers or consumers or.
2) Produce of persons engaged in handloom, handicraft and other cottage industries;
3) Any product resulting from any of the above activities, including by product of such products;
4) Ant product resulting from an ancillary activity that would assists or promote any of the aforesaid activity, or anything ancillary thereto;
5) Any activity which is intended to increase the production of any the above products or improve the quality thereof.

Formation of Product Company and its registration:

Any ten or more individuals each of them being a producer, or any two or more producer institutions or a combination of 10 or more individuals and producer institutions having above objects may form an incorporated company as a producer company.

If the registrar is satisfied that all the requirements have been complied with in respect of registration and matters precedent and incidental thereto, within 30 days of the receipt of the documents required for registration, register the memorandum the articles and other documents if any and issue a certificate of incorporation.

The producer company shall be a company limited by shares. On registration the producer company shall become a body corporate a if it is a private company, without however, any limit to the number of members thereof. The producer company shall not under any circumstances whatsoever become or deem to become a public company.