Agro Producer Company
A Agro Producer Company is a legally recognized business entity formed by a group of producers, primarily engaged in farming or agricultural activities. The concept was introduced under Chapter IXA of the Companies Act, 1956, and is now governed by Section 581B of the Act. The main objective of a Producer Company is to enhance the livelihood of farmers and agriculturalists by collectively engaging in production, procurement, harvesting, processing, marketing, and export of primary produce.
Key Features of a Agro Producer Company
Limited Liability | Registered Under the Companies Act | Only Producers Can Form a Producer Company | Separate Legal Entity | Primary Focus on Agricultural & Allied Activities
Procedure For Formation Of Agro Producer Company Through TaxWare ?
Benefits Of Formation Of Agro Producer Company
(A) Limited Liability
The Members and the Producer Institutions have limited liability towards the debts and obligations of the company. Their personal assets remain unaffected in any case of loss or winding up. With assurance to limited liability, the producers can invest with lower risk into such businesses.
(B) Separate Legal Existence
A Producer company is a Separate legal entity from its Members and the Producer Institutions in the eyes of law.It can have a PAN number, bank accounts, licenses, approvals, contracts, assets and liabilities in its unique name.
(C) Conflict Of Interest
No individual, who has any business interest which is in conflict with business of the Producer Company, shall become a Member of that Company.
(D) Equity Shares
Share Capital of a Producer Company shall consist of Equity Shares only.Member's equity cannot be publicly traded but be only transferred.
(E) Public Limited
A Producer Company can never be converted into a Public or a Deemed Public Company.
Why Choose a Agro Producer Company Over Other Business Structures?
| Business Type | Governing Act | Limited Liability | Primary Focus | External Funding Allowed |
|---|---|---|---|---|
| Agro Producer Company | Companies Act, 1956 (Chapter IXA) | ✅ Yes | Farming & Agriculture | ✅ Yes |
| Private Limited Company | Companies Act, 2013 | ✅ Yes | General Business | ✅ Yes |
| Co-operative Society | Co-operative Societies Act | ✅ Yes | Member Welfare | ✅ Yes |
| Partnership Firm | Partnership Act, 1932 | ❌ No | General Business | ❌ No |
