Producer Company Registration for Farmers (FPO)

What is a producer company?

A producer company is a company owned by primary producers – farmers, fishers, dairy producers, artisans and similar groups – to carry on activities connected with their produce: procurement, processing, marketing, buying inputs and sharing knowledge. It combines the democratic, member-owned spirit of a cooperative with the limited liability and governance of a company. Producer companies are the most common legal form for Farmer Producer Organisations (FPOs).

Who can form one

Why form a producer company

• Bargaining power – buy seeds, fertiliser and equipment and sell produce collectively.
• Limited liability and a separate legal identity for contracts, loans and bank accounts.
• Access to support – producer companies can apply for government FPO schemes, institutional credit and buyer tie-ups.

How a producer company is run

• Members – only primary producers and producer institutions; shares cannot be sold to outsiders.
• Voting – generally one member, one vote, however many shares a member holds.
• Board – at least five and up to fifteen directors, elected by the members.
• Chief executive – a full-time chief executive is appointed by the board to manage the business.
• Sharing the surplus – members can receive a limited return on their share capital and a patronage bonus in proportion to the business they do with the company, such as the produce they sell through it.
• Accounts – annual audit and filings with the Registrar, and an internal audit of the company's accounts.

Government support for farmer producer organisations

Registered FPOs can benefit from central and state government programmes, delivered through implementing agencies such as NABARD and the Small Farmers' Agri-Business Consortium. Support typically includes help with management costs in the first years, an equity grant that matches the members' own share capital, and credit guarantee cover for loans from banks. Many states also offer support for storage, processing and market access. We help you put the company and its records in order so it can apply.

Activities a producer company can take up

• Buying seeds, fertilisers, feed and equipment in bulk for members
• Aggregating, grading, storing and selling members' produce
• Processing – milling, packaging, dairy processing or value-added products
• Providing technical advice, training and credit to members
• Exporting members' produce, with an Import Export Code

Most producer companies also need GST registration once they trade, FSSAI registration if they handle food, and MSME (Udyam) registration for credit benefits.

Our service

We check member eligibility, obtain DSCs and DINs, draft the MOA and AOA with the objects your members need, and incorporate the company with the MCA. If you are deciding between structures, see NGO registration or a Section 8 company.