A producer company is defined as a body of framers or agriculturists which is legally recognized. These companies are established to improve the standard of living and ensure a good status of their support, incomes, and profits. Under the previous companies act, i.e. the Company Act of 1956, a producer company could be formed with a minimum of 10 people or more, or 2 institutions or more, or with a combination of 10 individuals and 2 institutions as well.

The objectives of the producer company can be as follows: 

1. Production
2. Grading
3. Harvest
4. Marketing
5. Selling or export
6. Pooling goods etc

The objectives of the producer company are stated under section 581B of the act, which includes activities like producing, harvesting, procuring the primary production of the members of the company, or import goods or services for their benefit. A producer company may also help in preserving, drying, canning, venting, brewing, etc. the work of the Producer company can also be extended to supply of machinery and all the necessary resources to its members. This clause defines the scope and objectives of the producer company. 

The basic conditions for establishing a producer company are:

1. There must be 10 individual or 2 institutions or a combination of the two 
2. A minimum capital of Rs. 500,000, that is required for the incorporation of the producer company 
3. The minimum number of directors should be 5, the maximum limit is 15 directors. 
4. A producer company cannot be converted into a public company. However, a producer company may be converted to a co-operative society.

The procedure of registration of a Producer Company is quite similar to that of a Private Limited Company. The process begins by obtaining the digital signature and the Director Identification Number (DIN) from the directors of the company. Once these are collected, then an application is drafted and submitted for the reservation of the name of the company. This application is submitted before the Registrar of Company (ROC). As per the act, the name of the producer company must end with the words “Producer Limited Company”. Once the application for reservation of name is approved by the ROC, an application is made for incorporating the company. This application needs to be submitted with other required documents before the ROC and when the ROC is satisfied with the documents given, 

he grants the certificate of incorporation. 

Establishing a producer company has certain advantages, such as: 

1. The members of the company are entitled to receive bonus shares in the same proportion as the shares they hold
2. The members at the initial stage receive the value of the goods which have been pooled in by them; this is later on given in the forms of shares, equity, cash, or kind. 
3. The income tax act does not state any benefits directly related to the producer company, however, subject to the agricultural activities carried on by the producer company, certain tax benefits, and exemptions can be availed. 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.