The Concept and Objectives of Producer Company in India.

The producer companies are the companies which is registered under the act the Producer companies Act 2013 and this concept was inaugurated in 2002 to incorporate following objectives;

  • Harvesting.
  • Pooling.
  • Gardening.
  • Marketing.
  • Learning.
  • Importing.
  • Exporting.
  • Handling.

The producer company meaning all those things have been produced through farming activities. In simple terms, the company procedure related with the farming and agriculture is known as Producer Company.

The concept of the producer company registration is to empower farmers by offering farming facilities.

Objectives of the Producer Companies as per section 581B:

  • The main objectives of the Producer Company in India  to empower primary producer like farmers by offering facilities so that they can do their work effortlessly.
  • Providing learning courses to the primary producer to make their educated regarding farming.
  • Offer insurance to the producers or their primary produce.
  • Offering techniques of mutuality and mutual assistance.
  • Manufacture, offering equipment and machinery, consumables mainly  to members.
  • Offering financial services, technical services, research and development for the interest of the members.
  • Processing including preserving, venting, canning, brewing, and packing of produce items of its members.
  • Distribution of power, transportation, revitalization of land, water resources relatable to primary produce.

Types of Producer Company:

Mainly, there are five types of Producer companies in India  and that are mentioned below:

  • Production Business: In a general term, a production word related with the combination of raw material and plan to make something for a consumption. The production business is related with production and procurement of the items.
  • Marketing Business: In a general term, a marketing word related with the process of interesting potential consumers in your products. The marketing business practice selling farming products to other consumers and companies.
  • Technical Service Business: Technical service refers to the technical analysis of the product, do research and development and conducting training for operating machinery.
  • Financial Business: This Company undertake to help Producer Company to achieve financial goals. Right from managing the cash flow to take a loan financial business handles everything effortlessly.
  • Infrastructure Businesses: The business involved in providing infrastructure to the producer company in the form of water resources, land, electricity, techniques, and land utilization may contribute themselves as a Producer Company. 

Silent Provision of producer Companies and Registration as per section 581C

Any at least ten people, every one of them being a producer or any at least two Producer foundations, or a blend of at least ten people and Producer organizations, envious of shaping a Producer Company having its articles determined in area 581B and generally following the prerequisites of this Part and the arrangements of this Act in regard of enrollment, may frame a joined Company as a Producer Company under this Act.

(2) If the Registrar is fulfilled that every one of the necessities of this Act have been agreed to in regard of enrollment and matters point of reference and accidental thereto, he will, inside thirty days of the receipt of the records required for enlistment, register the reminder, the articles and different archives, assuming any, and issue a testament of consolidation under this Act.


(3) A Producer Company in India so shaped will have the risk of its Members restricted by the reminder to the sum, assuming any, unpaid on the offers separately held by them and be named an organization constrained by offers.


(4) The Producer Company in India may repay to its advertisers all other direct expenses related with the advancement and enrollment of the organization including enlistment, lawful charges, printing of a notice and articles and the installment thereof will be liable to the endorsement at its first broad gathering of the Members.


(5) On enrollment under sub-segment (1), the Producer Company in India will turn into a body corporate as though it is a private restricted organization to which the arrangements contained in this Part apply, without, be that as it may, any breaking point to the quantity of Members thereof, and the Producer Company will not, under any condition, at all, become or be regarded to turn into an open constrained organization under this Act.

Tax Benefits for Producer Companies:

A huge part of Indian economy is based on the agrarian. More than66% Indian citizens livelihood depend on the farming. The Indian Income tax, 1961 specially exempts tax on agriculture income under section (1). However, the exemption for such agriculture income shall sometimes depend on the agriculture activity. For an instance, income derived from selling the green tea leaves is an agriculture income under the Income tax and it is 100% tax free. But, if the tea leaves further process to make tea than only 60% of such income will be considered as agriculture income and rest 40% of such income will be taxed.

Benefits for Producer Companies in India :

  • The producer companies members will get the value for their produce items and supplied as determined by the direction. The amount is given to the members in the form of equity, cash and shares.
  • The members of the producers company receive Patonage bonus.
  • The members will get easily loan for a specific period of time within not exceeding 7 years.
  • The members of the producer companies will be entitled to receive bonus.

Final say:

I hope now you understand the concept and objective of Producer Company act 2013. For Producer company registration you can contact us our legal advisors of Unilex Consultants.

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