Producer Company Registration Under Companies act 2013:

"Producer Company" means a body corporate having objects or activities specified in section 581B and registered as Producer Company under the Companies Act, 2013.  The primary objective of the company must be to facilitate the production, procurement, harvesting, pooling, grading, handling, marketing, selling, export, or import of primary produce of the members or import of goods or services for their benefit.

Main Business of Producer Companies:
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A producer company is basically a body corporate registered as Producer Company under Companies Act, 2013 and shall carry on or relate to any of following main activities classified broadly:

(a) Production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit

(b) Rendering technical services, consultancy services, training, education, research and development and all other activities for the promotion of the interests of its Members

(c) Generation, transmission and distribution of power, revitalization of land and water resources, their use, conservation and communications relatable to primary produce

(d) Promoting mutual assistance, welfare measures, financial services, insurance of producers or their primary produce

Process of Incorporation of a Producer Company in India​

At Least 10 Producer: Producer who will promote / incorporate the Company. Promoters may be individual or producer institutes.

• At Least 5 Directors: Directors should be individual only.
• Generally, in most of the cases, Promoters and Directors are the same in Companies.
• Ensure that the proposed company meets the eligibility criteria as specified under the Companies Act, 2013. This includes having at least ten producer members or two producer institutions or a combination of both, and the primary objective of the company must be related to the production, procurement, marketing, etc., of primary produce.
  

  Benefits Of Producer Company Registration

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1. Collective Bargaining Power: By pooling resources and forming a collective entity, members of Producer Companies gain increased bargaining power when dealing with buyers, suppliers, and other stakeholders. This can lead to better prices for their produce and reduced input costs.

2. Access to Credit and Finance: Producer Companies can facilitate access to credit and finance for their members. They can leverage their collective strength to obtain loans, grants, or subsidies from financial institutions, government schemes, or other sources. This enables farmers to invest in modern farming techniques, equipment, and infrastructure.

3. Market Linkages and Marketing Support: Producer Companies provide market linkages and marketing support to their members. They help in aggregating produce, standardizing quality, branding, packaging, and marketing the products more effectively. This leads to improved market access and better realization of prices for farmers' produce.

4. Capacity Building and Training: Producer Companies often organize capacity-building programs, training sessions, and workshops for their members to enhance their skills and knowledge in areas such as agricultural practices, value addition, post-harvest management, and business management. This empowers farmers to adopt best practices and improve their productivity and profitability.

5. Risk Mitigation: By working collectively, members of Producer Companies can mitigate various risks associated with agriculture, such as price volatility, weather-related risks, input supply disruptions, and market uncertainties. Diversification of activities and collective risk-sharing mechanisms can help stabilize income and improve resilience.

   MSME Benefits Of Producer Company

1. Priority Sector Lending: Producer Companies engaged in agriculture and related activities are often considered as priority sector lending by banks and financial institutions. This means they may have easier access to credit at favorable interest rates compared to other sectors.

2. Credit Guarantee Scheme: The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) provides credit guarantee coverage to MSMEs, including Producer Companies, for loans up to a certain limit. This helps in reducing the risk for banks and financial institutions, encouraging them to lend to such entities.

3. Subsidized Loans and Interest Rates: Various government schemes provide subsidized loans and interest rates for MSMEs, which may include Producer Companies. These schemes aim to promote entrepreneurship, innovation, and growth in the MSME sector by making financing more affordable and accessible.

4. Capital Subsidy: MSMEs, including Producer Companies, may be eligible for capital subsidy schemes offered by the government for setting up infrastructure, acquiring machinery and equipment, or implementing technology upgrades. This can help in modernizing operations and enhancing productivity.