Producer Company

Authorized Activities Of Producer Company

The producer company deals with the production done by its members and is authorized to carry on
any of the following activities –

Processing of the production done by its members. Processing includes preserving, brewing, vinting,
drying, distilling, canning and packaging.

Manufacturing & sale of machinery, equipment or consumable to its producer members.
Providing education on the mutual assistance principle to the members of the producer company as
well as others.

Rendering consulting services, technical services, training, research & development and other needed
activities to promote the interest of producer members.

Generation, transmission and distribution of power, revitalization of land and water resources,
conservation and communication etc.

Insurance of the first production & its producer.

Promotion of techniques of mutuality and mutual assistance.

Welfare of members of the producer company as decided by the board.

Providing financial assistance to its producer members such as financing of marketing, procurement,
processing or other activities such as extending of credit facilities.

Documents Required For Producer Company Registration

For Promoters & Directors
Photograph
PAN card Aadhar card/voter identity card
Electricity or water bill of business place
Rent agreement (If property is rented)
Property papers (If property is owned)
NOC from landlord
For Registered Office
Rented property - Rent agreement
Owned Property –
Electricity or water bill of business place
NOC from landlord

Advantages Of Producer Company Registration In India

The main advantages of a producer company registration are – Separate legal entity –
A producer company has a separate legal entity. It offers the benefit of limited liability and perpetuity.
Therefore, the members of a producer company have no liability towards the creditors of a producer company.

Better credibility –

Producer Company offers greater credibility in comparison to that offered by unregistered organization
of agriculturists/farmers. They are registered and monitored by the central government whereas
producer organizations are monitored by state governments.

Easy management –

The changes in board of management of a producer company can easily be made by just filling few
simple forms with the ROC. Owning property –
A duly registered producer company is only entitled to sell or own a property in its own name.

Reasonable rate of interest –

A producer company is fully entitled to accept deposits from its producer members and give loans to its
producer members at reasonable rate of interest.

Uninterrupted existence –

A producer company offers a benefit of perpetual succession. It has a continuous run or uninterrupted
existence until it is legally dissolved.

Tax Benefit On Producer Company Registration

According to income tax act, 1961, agricultural income is exempted under section 10(1). The exemption provided under section 10(1) may vary sometimes depending upon the basis of agricultural activity. You can avail certain tax benefits or exemptions on the agricultural activity carried out by a producer company. For ex – Income from selling the grown green tea leaves comes under agricultural income and it is 100% tax free but if tea leaves will go further for processing for tea manufacturing. 60% of income is considered as agricultural income & 40% of such income will be taxable.