A Producers company is a legally recognized entity for farmers to enhance their living standard and to ensure income, profitability and the good status of available support. As per the company's act 1956, A minimum of 10 (or more) individuals, 2 institutes (or more), or their amalgamation (10 individuals and 2 institutions) is the primary condition to start a producers company. 1. Procurement 2. Production 3. Harvesting 4. Grading 5. Pooling 6. Handling 7. Marketing 8. Selling, or 9. Import-Export The Producers Company's main purpose is to facilitate cooperative business operations and turn them into business into companies.

The Producer Company deal with the produce of its members, and it's authorized to do the following activities: Processing its members' produce includes preserving, brewing, vinting, drying, distilling, canning, and packaging. Manufacture, sale or supply of tools, equipment, and machinery to its producer members. To educate the producer members on the principles of mutual assistance of the producer company and others. To render technical services, consultancy services, training, R&D and all other essential activities for promoting the interests of producer members. Generation, transmission and allocation of power, conservation and communication relatable to fundamental produce, revitalization of natural resources like land and water, Insurance of the primary produce and its producer. To promote the techniques and methods of mutuality and mutual assistance. The welfare of members of the produce company's as may be determined by the Board. To finance procurement, marketing, advertising, processing, or other activities such as extending credit facilities or any further financial aid to its producer members. Any other action (ancillary or incidental to the producer company's main objectives) promotes mutual assistance amongst the producer members and the lines of principles of mutuality.

Any 10 or more individual producers can join together to form a production company. However, there is no upper limit to the number of members. Or, any 2 or more institutions as a producer can form a producer company. A minimum capital requirement is Rs. 500,000 is to incorporate a producer company. A minimum of 5 directors (maximum 15) are necessary to start a producer company.

Once a corporation is incorporated, it will gain the status of active and remain in existence till the annual compliances are met. If annual compliances aren't complied with, the corporate will become a Dormant Company and lose its existence. A struck-off Company is often revived for a period of up to 20 years.

MEMBERS' BENEFITS:- The members will initially receive the worth of produce pooled and supplied as may be determined by the directors. This amount is later distributed in the form of cash or allotment of equity shares. Members are entitled to receive bonus shares in proportion to the investment of the shareholders. The surplus left after provision for payment of limited return and reserves may be allocated as patronage bonus. Patronage bonus is the revenue out of surplus income to members in proportion to their patronage. On the other hand, patronage is the benefit of producer companies' services to their members by participating in their business activities. TAX BENEFITS:- The Indian Income Tax Act, 1961(“the IT Act”) notably exempts tax on agricultural income under section 10(1). However, the exemption for such agricultural income may differ sometimes based on the type of agricultural activity. It is crucial to notice that the IT Act does not offer any unique benefits or exemptions to producer companies as per the definition. But subject to the type of agricultural activity undertaken, certain tax benefits can are available. For instance, income from green tea leaves sold in the market is agricultural income under the IT Act, which is 100 % tax-free. But if the green tea leaves are processed further to manufacture tea, then only 60% of the income is redeemed as agricultural income. Thus, it is clear that the tax exemption to the income of the producer company relies on the type of activity carries on. LOANS AND INVESTMENTS:- The members of the Producer Company are primary producers and constantly require financial assistance. Hence, a special provision is launched by Act 61 of Producer Company for granting loans to its members. The Company can provide financial aid to its members through:- The credit facility is given to any member related to the business Producers Company for not more than six months. Loans taken against security mentioned in articles are repayable at least within three months but not more than seven years from the expiry of refund of such loans. NABARD Loan: NABARD has taken up the responsibilities to support and fulfilling the needs of Producer Companies. In 2011, NABARD raised up to Rs. 50 crore Producer Organisation Development Fund (PODF) out of its operating surplus.

It is designated to all existing and proposed Directors. It is mandatory for all present or proposed Directors to possess this particular number. It never expires and an individual can have just one Director number.

An address in India where the registered office of the Producer Company is going to be situated is needed for the process. The premises are often industrial/residential/commercial where communication from the MCA is going to be received.