What is Producer Company ?
Producer Company is a company registered under the Companies Act, 2013, which has the objective of production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit. Produce are things that have been produced or grown, especially by farming. Therefore, a Producer Company deals primarily with agriculture and post harvest processing activities.
Over 85% of the Farmers in India are small and marginal farmers with land holdings of less than 2 hectares. This fragmentation in farmers and farm lands, leads to disorganization and it is not viable for Indian farmers to adopt the latest technologies. By organization of these farmers into producer companies, economies of scale can be unlocked and the livelihood of farmers can be improved. Thus the concept of producer company is aimed at empowering farmers by creating clusters of farmers organized as a Producer Company.
A producer company is a legal entity and a juristic person established under the Act. Therefore, a producer company has wide legal capacity and can own property and also incur debts. The members (Directors) of a producer company have no liability to the creditors of a producer company.
The Board of Management of a producer company can be easily changed by filing simple forms with the Registrar of Companies. The Board of Management of a producer company controls the activities of the producer company.
A producer company being a juristic person, can acquire, own, enjoy and alienate, property in its own name. No member can make any claim upon the property of the producer company as long as it is a going concern.
A producer company has 'perpetual succession', that is continued or uninterrupted existence until it is legally dissolved. A producer company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.
A producer company enjoys better credibility when compared to unregistered producer organizations. Producer companies are registered and monitored by the Central Government. Producer Organization are on the other hand governed and monitored by State Governments.