A Producer’s Co-operative is typically operated by farmer in order to process and market their goods as well as to acquire credit, equipment and production supplies. The concept allows farmer co-operative to operate as a corporate entity under the ministry of corporate affairs it enable incorporation of co-operative as companies and conversion of existing co-operative in to company example AMUL BUTTER. Only a ‘Primary producer’ can become shareholders in the producers company i.e those who are engaged in primary production.
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It Cover activities such as
Animal husbandry: breeding or caring of animals in the farm.
Horticulture: Producing, growing plants, fruits or vegetable.
Floriculture: Growing flowers
Pisciculture: Fish Farming
Viticulture: Producing grapes
Foresting: Preserving Forest
Re-vegetation land: Re-building or re-planting distributed land
Bee liaising: keep bees to collect honey
Area of operation is not restricted as compare to co-operative society and it has lesser government intervention in producer company are more preferred.
ADVANTAGES OF PRODUCER COMPANY
Death and insolvency of any of the member does not affect the continuity of the company. Thus the life of its members does not affect the company. Person can become member or even can leave the organization. Transfer of share can not affect the company.
LEGAL SEPARATE ENTITY
Producer Company is an artificial distint Entity so it is separated by law from its owner. In case of Sole Proprietorship business comes to wound up in case of death of the owner unlike Producer Company.
The liability of the shareholder is limited upto unpaid subscription money in his name and the personal Asset does not get affected by it unlike Sole proprietor or Partnership Firm.
Producer Company is the Hybrid form of the Co-operative Society and Corporate Entity.