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Producer company has different objectives which are generally taken to mean that it is associated with the farming activities. But mind that, it is not the case so. One might while taking a quick glance wonder that the producer company is only associated with farming and its operations. It has wider application and includes a variety of activities. It is not limited to only farming activities but it also includes in other sectors too such as primary, secondary and tertiary sector too.
The producer company has greatly shifted the paradigm in the industries in which it has stepped, it has established as a useful enterprise because it offers various taxation benefits under various taxation schemes in the constitution of India. Moreover, apart from various taxation benefits it also helps in getting the advantage under the various schemes established by the Ministry of Corporate Affairs. The producer company has greatly suited small enterprises which have the processes that are listed above. Producer company is a great form of enterprise which has greatly benefited small time business personnel.
This was made possible because of the fact that the producer company was easy to form and there are not much legal compliances to be followed to. Thus, we see there are numerous advantages but there are many disadvantages too such as, no easy availability of credit, limited operations etc.
All in all, a producer company is generally preferable for businesses which are small but deal with the objectives laid down above. It is not for big businesses which have huge scale of operations be it grading, packing, marketing etc. because their objectives are different and do not coincide with the objectives of the producer company. It is therefore for this reason that the big companies or corporations generally do not form a producer company.
They prefer to form an entity such as private limited company which is much more suited to their business objectives and also helps them to achieve their objectives and help them to grow and develop in the right direction.
Producer Company is body corporate having an object that is one or all of the following: harvesting, procurement, grading, production, marketing selling, and export of primary products of the members or import of goods or services for their benefit. In Producer Company Registration process, you can appoint agriculturist members and accept deposits in the form RD/FD and provide them maturity as well as distribute loans to your farmer members and charge interest from them.
Q1. What is a producer company?
Ans. A producer company as defined under the Companies Act 2013, is the company having each or every one of the following activities as its objectives such as, production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit.
Q2. What are the types of producer companies?
Ans. Types of producer companies in India: 1. Production business 2. Marketing business 3. Technical service business 4. Financing business 5. Infrastructure business
Q3. What are the documents required for the registration of a producer company?
Ans. Following documents are required for the registration of the producer companies: 1. Identity proof of directors 2. Address proof of directors 3. Digital signature 4. Passport size photograph 5. Office address proof
Q4. What are the advantages of a producer company?
Ans. The producer company has following advantages: 1. Separate Legal entity 2. Easy management 3. Greater Credibility 4. Limited Liability
Q5. What are the disadvantages of a producer company?
Ans. The producer company has following disadvantages: 1. High input prices 2. Low cash flow 3. No economies of scale
Q6. What is the objective of producer company?
Ans. The producer company has the objective of production, handling, procurement, grading, pooling, handling, marketing, selling and export of primary produce of the members or import o goods or services for their benefit.
Q7. What if a member of a producer company ceases to be the primary producer?
Ans. In case of the circumstances where the producer company ceases to be the primary producer, the Board of Directors shall surrender the shares when they have been satisfied that the condition in question has been met.
Q8. What are the benefits available to producer company?
Ans. The producer company has the benefit under the Income Tax Act where the tax on agricultural income is exempted depending on the kind of agricultural activity carried on.
Q9. What is the minimum number of directors required for the formation of producer company?
Ans. Every producer company shall have at least five and not more than fifteen directors However, under the special circumstance of inter-state co-operative society incorporated as a producer company, it can have more than fifteen directors.
Q10. How many members are required to form a Producer company?
Ans. The following combination can form a Producer Company: 1. Any ten or more individuals each of them being a producer 2. Or any two or more Producer institutions 3. Or combination of 10 or more individuals and producer institutions.
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