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Producer Company is a company registered under the Companies Act 2013 and shall carry on any of the following activities:

  1. Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of members or import of goods or services for their benefit;
  2. Processing including preserving, drying, distilling, brewing, venting, canning and packaging of produce of its members; and
  3. Manufacture, sale or supply of machinery, equipment or consumables mainly to its members.


i. The registered producer company is treated as a private limited company.
ii. These companies are with limited liabilities and limited only by share capital.
iii. The maximum number of members can exceed 50.
iv. It shall never become a public (or deemed public) limited company.


To offer a statutory and regulatory framework that creates the potential for producer-owned enterprises to compete with other enterprises on a competitive footing.

To provide for the method of formation and registration of “Producer Companies” which, inter alia carries the principles of “mutual assistance” and “Co-operation” within the more liberal regulatory framework afforded by the company law with suitable adaptation.

To provide an opportunity (on a purely voluntary basis), to the existing large multi-state cooperative institutions and societies, to voluntarily convert themselves into the new form of producer companies.


i. Minimum 5 directors are mandatory to run a producer company. All directors must possess DIN and DSC.
ii. Minimum paid-up authorized capital to incorporate Producer Company is of Rs. 5 lakh.


  1. Choose a name
  2. Have a Company address
  3. Appoint minimum of 10 members out of which appointment of five directors is mandatory.
  4. Register Producer Company with MCA.

CHOOSE A NAME: A producer company should be named using the following suffix “…..Producer Company Limited” appropriately indicating its status as a producer company. The word “private” is not used in the naming process and the absence of which does not indicate that the company is a “Public”.

Ensure that name is not similar to any other Producer company. Also, do check if the name is not a registered trademark taken by anybody under the IP act.

Also, ensure that the name is not too generic to be accepted by the ROC. Avoid to use abbreviations, adjectives.

Company Address: You can open a company to your residential address also. There is no need to have a commercial place to open up a company. This office address can be changed at any time after incorporation of the company. Once your start-up is set up, stable and ready to move on to a nice corporate space you can change the registered office address by informing to the ROC office.

For Registered Office Address One needs:-

If, Owned Premises: Any latest utility bill i.e. Electricity bill/water bill/mobile bill in the name of the owner which should not be older than two months + NOC from the owner.

If, Rented Premises: Any latest utility bill i.e. Electricity bill/water bill/mobile bill in the name of the owner which should not be older than two months + NOC from the owner + Rent agreement/Rent receipt.


Any of the following combination of producers can incorporate a producer company:

  • Ten or more producers (individuals); or
  • Two or more producer institutions; or
  • Combination of the above two.

Below is a descriptive explanation on DSC and DIN:

Digital Signatures Certificates (DSC): A digital signature is an electronic signature, which is in the form of codes. It is used for signing the electronic forms, filed with ROC for incorporation of Company. It looks like a pen drive. Digital Signature cannot be used in physical documents.

Digital signatures are protected with a PIN. It takes 1-2 days to get it issued, and it costs around Rs.800/- to Rs.1500/-.

Every proposed Director must have a DSC for making an application to obtain the DIN Director Identification Number (DIN) is a unique identification number required for a person to become a director of a company. DIN is issued by ROC office (Ministry of Corporate Affairs).

It is similar to a PAN Card number. DIN is to be mentioned in documents while appointing a person as a director of a company.

A shareholder or stockholder is an individual or institution (including a corporation) that legally owns a share of stock in a public or private corporation. It is mandatory to appoint seven shareholders at the time of incorporation. Directors appointed can act as a shareholder. For a shareholder DIN and DSC is not mandatory.


i. Making of DINs and DSCs
ii. Drafting of the perfect MOA and AOA of the Producer Company
iii. Other documents deemed necessary.
iv. Filing application for Incorporation of the company (Form No. INC-29)


The promoters should pull the amount needed for incorporation of a company. Amount (loan) given by the promoters in the initial stage will be reimbursed by the company.

The payment however, needs to be approved by the members in the first general meeting of the Producer Company.


India has witnessed fewer than one hundred registered producer companies as yet. Majority of the Companies are floated in Maharashtra and Madhya Pradesh as an initiative by the Government basically for the betterment of unprivileged farmers. For example, Government of Madhya Pradesh under District Poverty Initiatives Programme (DPIP) has promoted a few Producer Companies in various parts of the State to eradicate poverty.

The following is a list of few companies incorporated as Producer Companies in India:

The Indian Organic Farmer Producer Company Limited is an Aluva (Kerala) company of farmers producing organic products.

Vanilla India Producer Company Ltd (VANILCO) has been promoted by Kerala based Indian Farmers Movement (Infarm), a charitable society with over one lakh farmer members for catering to the long-term interests of the vanilla farmers.

Coinonya Farm Producer Company Limited for turmeric and Karbi Farms Producer Company Limited for ginger and chilly in Assam.

Karnavati Producer Company Limited in Madhya Pradesh.

Case Study-1

Amul plant at Anand, Gujarat

It was in the year 2006 in the month of May wherein a major initiative by AMUL, which is a cooperative society was to change the organizational model by transforming the co-operative society into a producer company. The proposed transformation was basically to have an exit from the very restrictions of co-operatives.

The below quoted are the then views of the Chairman of AMUL :

"The State Government's permission is required for everything now, from opening of offices in other States to investment of surplus funds, issue of bonus shares, election of Chairman and appointment of statutory auditors. It gives lot of scope for official interference. The Companies Act, which is a Central legislation, is comparatively more liberal, especially since the passing of an amendment in 2002 enabling creation of `producer companies'. These are akin to private limited companies, though in this case, there are no limits to the number of members.

Moreover, voting rights are based on the cooperative principle of one man-one vote and not the extent of shareholding as in normal private or public limited companies.

"A producer company will have more flexibility in so far as investment in other companies and formation of subsidiaries is concerned.

"Also, since shares can be attached, it would be possible to raise more borrowings from commercial banks and other institutions for expansion of business," the official added.

However, as yet AMUL is a co-operative society as the proposal above was not implemented.

Case Study-2:

Vanilla India Producer Company Limited (Vanilco) is a new venture, promoted by Indian vanilla farmers to protect the long-term interest of vanilla growers all over the country. Vanilco is a Producer Company with the twin objective of promoting vanilla production and processing vanilla as per international standards. Vanilco is owned by farmers and it works in tandem with them to produce and market the best vanilla beans and extracts. Its goal is to ensure a just and fair value for the farmers’ produce at par with the international markets and standards. The company procures, processes, benchmarks and markets the farmers’ produce and generate profits that are distributed to shareholders as handsome dividends. Today Vanilco is recognized as one of the most reliable suppliers of natural vanilla in the market.


A producer company is thus a hybrid between a private limited company and a cooperative society. It combines the goodness of a cooperative enterprise and the vibrancy and efficiency of a company. It accommodates the unique elements of cooperative business with a regulatory framework similar to that of a private limited company.


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