EnglishProducer Company is another classification of Private and Public Company. These types of companies have the features of cooperative societies. Only ‘primary producers’ or ‘producer institutions’ can form a producer company and participate in the ownership of such companies.
‘Primary Producers’ means people engaged in the process of Primary Produce. Primary produce means produce of farmers arising from agriculture including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, re-vegetation, beekeeping and farming plantation products. It can also include the production of persons engaged in handloom, handicraft and other cottage industries, by-products of such products, and products arising out of ancillary industries.
The Advantages of Producer Company are given below:-
Separate Legal Entity
The benefits of a Producer Company come from that it is an organization i.e. it is a legitimate and a juristic entity developed under the Act. Therefore, a producer association has an extensive legally recognized limit and can declare property and in addition obtain obligations. The individuals or the directors of a producer entity have no obligation to the producer organization’s lenders as it is a separate legal entity.
Tax Benefits
If the companies are registered as farmer-producer companies then a 100% deduction applies to those companies with an annual turnover of Rs. 100 crore and companies earning profit out of the same will not have to pay any tax. The Government of India has extended the advantages of Producer Company to 100% deduction to farmers as the farmers are the biggest pillars of our economy and the reason behind its growth
Simple Management
By documenting the basic structures of the company with the Registrar of Companies they can effectively change the Board of Management of the producer organization. The Board of Management of a producer organization controls and manages the functions of the producer company.
Loans and Investment
It is very imperative for the government to support these members of the producer companies with the finances as they are the initial producers and they will need funding from time to time. Hence, the Government has inaugurated the NABARD bank for the benefit of Producer Companies for farmers’.
The objective of the bank is to offer loans to the farmers for a period not extending beyond six months to meet the needs of the producer companies.
Continuous Existence
A producer entity has an ‘unending succession’ that can be continuously proceeded with until it is lawfully broken down. A producer organization, being a separate lawful entity is not affected by the takeoffs or demise of any part.
Good Governance
It is the responsibility of the Government for considering and keeping the interest of the members of the producer organization for the success of the organization.
Support for Procedure Company
SFAC, NABARD, Departments of Government, and Corporate, Domestic and International Aid Offices provide money additionally and dedicated help to the Producer Organization Promoting Establishment (POPI) for the advancement of the Producer Organization.
Help the Members
A Producer Organization will strengthen the individuals in receiving more salary by attempting the majority of the exercises recorded. The Producer Organization can purchase the products in mass at less expensive value. In addition, by transporting in bulk, the cost of transportation is decreased.
The Organization can also give data to the producers to authorize them to grasp their produce till the market cost become huge. All of these intercessions will lead to an increase in salary for the essential producers.
Better Facilities
A producer Organization is a huge platform for the primary farmers to obtain improved facilities. Thus, these members working in the benefits of Producer Company can effortlessly access government services like MNREGA, Pension, loans, PDS, and Scholarships.
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