Producer Company

According to Sec. 581C (1) of the Companies Act 1956, Producer Company is a company where there are ten or more individual, or each of them is a producer in any two or more producer institutions. It can also be combination of ten or more individuals or producer institutions. It should be desirous of performing a producer company. It should have its objects specified under Sec. 581B of the Companies Act of 1956.A Producer Company should also comply with the other provisions of the Companies Act of 1956.

"Producer Company" means a body corporate having objects or activities specified in section 581B and registered as. Producer Company under Companies Act. "Producer institution" means a Producer Company or any other institution having only producer or producers.


  • (a) Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit.
  • (b) Processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members
  • (c) Manufacture, sale or supply of machinery, equipment or consumables mainly to its Members
  • (d) Providing education on the mutual assistance principles to its Members and others
  • (e) Rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members
  • (f) Generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce
  • (g) Insurance of producers or their primary produce
  • (h) Promoting techniques of mutuality and mutual assistance
  • (i) Welfare measures or facilities for the benefit of Members as may be decided by the Board



  • Every Member shall initially receive only such value for the produce or products pooled and supplied as the Board of Producer Company may determine, and the withheld price may be disbursed later in cash or in kind or by allotment of equity shares, in proportion to the produce supplied to the Producer Company during the financial year to such extent and in such manner and subject to such conditions as may be decided by the Board.
  • Every Member shall, on the share capital contributed, receive only a limited return Provided that every such Member may be allotted bonus shares in accordance with the provisions contained in section 581ZJ.
  • The surplus if any, remaining after making provision for payment of limited return and reserves referred to in section 581ZI, may be disbursed as patronage bonus, amongst the Members, in proportion to their participation in the business of the Producer Company, either in cash or by way of allotment of equityshares, or both, as may be decided by the Members at the general meeting.