A producer company is a company incorporated under Companies Act 2013 (formerly the Companies Act 1956) and shall carry on following activities as mentioned in section 581B of Companies Act 1956:

• Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import goods for their benefit

• Processing including preserving, drying, distilling, brewing, venting, canning and packaging of produce of its members

• Manufacture, sale or supply of machinery, equipment or consumables mainly to its Members.

• Providing education on the mutual assistance principles to its Members and others

• Rendering technical services, consultancy services, training, research and development and all other activities for the promotion of interest of its members

• Generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce

• Insurance of producers or their primary produce

• Promoting techniques of mutuality and mutual assistance

• Welfare measures or facilities for the benefit of Members as may be decided by the Board

• Any other activity, ancillary or incidental to any of the activities referred to in above clauses which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner

• Financing of procurement, processing, marketing or other activities specified in above clauses which include extending credit facilities or any other financial services to its members

Over the period of time Producer Company has gained popularity due to the following:

• Co-operatives have largely been state promoted, with a focus on welfare rather than to do business on commercial lines and more State government intervention in the management of Co-operatives.

• Whereas Companies Act is central legislation comparatively more liberal and minimal government control in the management of the Company.

• A Producer Company is hybrid of Company and Co-operative Society.

• It combines the goodness of a co-operative enterprise and vibrancy and efficiency of a company and accommodates the unique elements of cooperative business with a regulatory framework similar to that of a company.