Producer Company

Brief Introduction

  • It is basically a Co-Operative Business, mainly to be incorporated in Agricultural Production.
  • Producer Company can be formed by 10 or more Individuals.
  • There should be minimum 5 Directors in a Producer Company.
  • Its name shall bear the words “PRODUCER COMPANY” at the time of registration.
  • Share Capital of Producer Company shall consist of Equity Shares only. Irrespective of Shareholding, one member shall have only one Vote.

Benefits of a Producer Company

  • It is a Separate Legal Entity and enjoys wide legal capacity.
  • It can own a property, incur debts, raise funds, etc.
  • The Company is not affected by death or unsoundness, unlike humans. Thus, it is having an uninterrupted existence until it gets dissolved. It remains live irrespective of changes in its membership.
  • A Company can borrow funds from markets and financial institutions. It can raise funds through issuing debentures (secured / unsecured) and it can also accept deposits from the public. Banking and Financial Institutions rely more on corporate entity rather than Partnership and Proprietorship concerns to grant financial assistance.
  • Shares of the Company can easily be transferred to any other person.
  • Members of Producer Company are not held personally responsible for the liabilities of the Producer Company.