What are the Different Types of Producer Companies?

Introduction

Producer companies have become an increasingly popular choice for producers in India to collectively work towards improving their income and social status. These companies are formed by a group of individuals, farmers, or producers engaged in a specific sector, and they provide various benefits to their members such as limited liability, better market access, and improved income. The Producer Company Registration is a simple and easy process under the Companies Act, 2013. In this article, we will discuss the different types of producer companies and the benefits of producer companies.

What is a Producer Company?

A producer company is a company registered with a minimum of 10 people and a maximum of 200 people under the Companies Act, 2013, with the objective of production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, and export of primary produce of its members, or import of goods or services for the benefit of its members.

Producer Company Registration is a simple and straightforward process, and it is mandatory for all producer companies to register under the Companies Act, 2013. The Producer Company Registration process involves the submission of necessary documents and payment of Producer Company Registration fees to the Ministry of Corporate Affairs.

What are the Benefits of Producer Companies?

The following are the benefits of Producer Companies:

1. The liability of the members of producer companies is limited to the extent of their shareholding, which provides protection to the personal assets of the members.

2. Producer companies provide better market access to their members by collectively bargaining with buyers, procuring raw materials, and selling their products.

3. Producer companies help in improving the income of their members by eliminating intermediaries, reducing transaction costs, and providing better prices for their products.

4. Producer companies can avail of institutional credit from banks, which helps in expanding their business and improving their production capacity.

5. Producer companies are managed democratically by their members, which ensures transparency and accountability in their operations.

6. Producer companies are eligible for tax benefits under the Income Tax Act, 1961, which reduces their tax liability and improves their profitability.

What are the Different Types of Producer Companies?

The following are the types of producer companies:

1. Agricultural Producer Company (PC): It is formed by farmers, agriculturalists, or producers who are engaged in the cultivation of crops, dairy farming, or poultry farming. The main objective of an agricultural company is to increase the income of its members and improve their agricultural practices.

2. Horticultural Producer Company (PC): It is formed by individuals who are engaged in horticulture, such as growing fruits, vegetables, flowers, or plants. The objective of a horticultural company is to improve the quality of its products, increase its income, and provide better marketing opportunities.

3. Sericulture Producer Company (PC): It is formed by individuals who are engaged in the production of silk, such as silk farmers, silk reelers, or silk weavers. The objective of a sericulture company is to improve the quality of silk produced, increase its availability, and provide better marketing opportunities.

4. Handloom Producer Company (PC): It is formed by individuals who are engaged in handloom weaving or handloom fabric production. The objective of a handloom company is to improve the quality of its products, increase its income, and provide better marketing opportunities.

Conclusion

In conclusion, producer companies are an excellent way for farmers to come together, improve their income, and provide better market access to their products. The benefits of a Producer Companies are limited liability, democratic management, and tax benefits. Producer companies are becoming an increasingly popular choice for producers in India.

 
Suggested Read: In and Outs of a Producer Company in India