Producer Company – Management and administration

Producer company is corporate structure where group of farmers comes together to act as member of the company to carry agricultural business on self-help basis with an intention to earn profit and provide help to each member of its company through democratic management.

These are incorporated to promote cultivation, harvesting, pooling, handling marketing of primary produce and endeavour for export and import of agriculture produce.

Part IX A of the Companies Act, 1956 states provisions of Producers Companies which is subsisting as in Companies Act, 2013 till the time government does not enact special law for producer companies.

In this article we will discuss about management and administration of Producer Company.


Management and administration are very wider term that includes various aspects which are mentioned in bullets which we will describe in brief.

  • Provisions related to Directors
  • Provisions related to Meetings
  • Provisions related to Finance& Audit
  • Provisions related to power of board
  • Miscellaneous Provisions


  • Strike Off of Company [Section 581 ZP]:

If Company fails to commence business within 1 year of its registration or cease to transact business.

If registrar is satisfied after making enquiry that Company is not carrying any object.

Then Registrar can order to strike off such company

Registrar can also remove name of Company on its own if he is satisfied that Company is not maintaining any of the mutual assistance principles

  • Application of provisions relating to private companies [Section 581 ZR]:

All the limitations, restrictions and provisions of this Act, other than those specified in this Part, applicable to a private company, shall, as far as may be, apply to a Producer Company, as if it is a private limited company under this Act insofar as they are not in conflict with the provisions of this Part

  • Amalgamation, Merger Or Division  [Section 581 ZN]

A Producer Company may, by a resolution passed at its general meeting,

Decide to transfer its assets and liabilities, to any other Producer Company, which agrees to such transfer by a resolution passed at its general meeting;

Divide itself into two or more new Producer Companies.

  • Penalty for Contravention [Section 581 ZM]

If any company/person carries object of Producer Company without registering as Producer: Rs. 10,000 per day

If any director wilfully does not provide any requisite information to members: Fine of 5% of turnover

Imprisonment of 6 month

If director or Company fails to convene AGM: Fine Rs. 1 Lakh

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