What is a producer company?
A producer company — commonly called a Farmer Producer Organisation (FPO) or Farmer Producer Company (FPC) — is a company formed by farmers and other primary producers under Chapter XXIA of the Companies Act, 2013. It lets producers pool their output and resources to get better prices, cheaper inputs and access to credit, while each member enjoys limited liability.
Benefits of forming an FPO
- Limited liabilityMembers' personal assets are protected from the company's debts.
- Better bargaining powerSelling in bulk helps members negotiate higher prices.
- Easier creditBanks lend more readily to an FPO than to individual small farmers.
- Government supportFPOs can access central and state support schemes, equity grants and credit guarantees, subject to eligibility.
- Market accessReach processors, retailers and exporters directly.
- Better inputs and trainingCollective purchase of seeds, fertiliser and equipment, plus technical support.
Eligibility
- At least 10 individual producers, or 2 producer institutions, or a combination of both
- At least 5 directors (maximum 15)
- Name ending with “Producer Company Limited”
- A registered office in India
- Objects limited to activities permitted for producer companies (production, harvesting, procurement, grading, processing, marketing and related services)
What can a producer company do?
- Production, harvesting, procurement, grading, pooling, handling, marketing and selling of members' produce
- Processing, including preservation, drying, brewing, packaging and value addition
- Supplying machinery, equipment and consumables to members
- Education, training and technical services for members
- Providing credit, insurance and welfare measures to members
- Promoting mutual assistance and cooperation
Membership and voting
Where all members are individuals, each member has one vote regardless of shareholding. Where members are producer institutions, voting is based on their participation in the company's business in the previous year (shareholding in the first year). Share capital consists only of equity shares and cannot be traded publicly.
Documents required
- PAN and Aadhaar of all members and directors
- Passport-size photographs
- Proof that members are producers — land records (RTC / pahani) or a certificate from the agriculture / horticulture department
- Registered office proof — utility bill, rent agreement and owner's NOC
- DSCs for directors (we arrange)
- MoA and AoA (drafted by us)
How CRSB registers your FPO
- ConsultationWe explain requirements, check eligibility and plan the member base and capital.
- Documents and DSCsWe collect member documents and obtain DSCs and DINs for directors.
- Drafting and filingWe draft the MoA and AoA with permitted objects and file the incorporation forms with the ROC.
- Certificate of IncorporationOnce approved, your FPO is a legal entity with CIN, PAN and TAN — and we help with bank account and scheme registrations.
Frequently asked questions
Can non-farmers be members of a producer company?
Membership is meant for primary producers — people engaged in activities connected with primary produce such as agriculture, horticulture, animal husbandry, fisheries or handlooms.
Can a cooperative society become a producer company?
Yes. An inter-state cooperative society can apply to be registered as a producer company with a special resolution passed by two-thirds of its members.
Are shares of a producer company transferable?
Shares can be transferred only to other active members with board approval. They cannot be listed or offered to the public.