A producer company is basically a body corporate registered under Companies Act, 2013 and shall carry on these farming related activities – production, marketing, technical & consultancy services, training & education, research & development, generation & transmission of power, revitalization of land & water resources, financial services, insurance, etc. The format of a producer company is a hybrid between a private limited company and a cooperative society; it attempts to combine the goodness of a cooperative enterprise and the vibrancy of a limited company. The same can be formed by two or more producer institutions or ten or more producers.
Benefits of a Producer Company
A Producer Company is a distinct legal entity and hence the members of the Producer Company are not liable for the debts of the Company. The loss would be restricted to the investment made by the Company.
The Company being managed by a Board ensures a professional approach. Further, annual returns are to be filled similar to a Limited Company. The structure also ensures a continuous existence.
With the majority of farmers in India being small and marginal they do not have the advantage of accessing the requisite resources, getting right prices, credit facilities and so on. This collective format enables them to overcome such hurdles facilitating a better growth.
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