Producer Companies Rules 2021: New Rules Notified by MCA

Producer Companies Rules 2021
| Updated: Feb 16, 2021 | Category: Business, Producer Company

Recently, the Ministry of Corporate Affairs, by way of a Notification, issued on 11.02.2021, has notified the Producer Companies Rules 2021. The said rules will supersede the previous Producer Companies (General Reserve) Rules 2003. Further, the said rules will come into force from the date of publication in the Official Gazette.

Also, it shall be relevant to state that the same has been done by the Central Government in view of the powers bestowed by section 378H (4), 378ZL (1), and subsection (1) and (2) of section 469 of the Companies Act 2013.

In this blog, we will discuss about the concept of Producer Companies, together with the provisions of the Producer Companies Rules 2021, passed by MCA.

Concept of Producer Company

The term Producer Company means a legally recognised business structure, which is formed by the Body of Farmers or Agriculturists. The main aim of this business format is to improve the living standard of farmers and to ensure support, income, and profitability to them.

Further, based on the provisions of the Companies Act 1956, a Producer Company needs a minimum of 10 individuals or 2 institutions, or a combination of the both, i.e., 10 Individuals and 2 Institutions, who are having their business objectives from either of the following listed:

  • Procurement;
  • Production;
  • Harvesting;
  • Grading;
  • Pooling;
  • Handling;
  • Marketing;
  • Selling, or;
  • Export;

Also, the said business objectives deal with the primary produce or harvest of the Members or the import of goods or services for their personal benefit.

Also, another one of the main purposes of a producer company is to simplify the incorporation of co-operative business as companies and to allow the conversion of existing co-operative business into business entities or companies.

Also, Read: Benefits of Farmer Producer Company in India

Key Provisions of the Producer Companies Rules 2021

The key provisions of the Producer Companies Rules 2021 are as follows:


The Producer Companies Rules 2021 will be applicable to Producer Companies as specified under the provisions of the clause (I) of section 378 A.


The definition clause of these rules includes the definition of the terms listed below:


It means the companies incorporated under the Companies Act 2013.


The term Section means the sections of the Act.

Cooperative Society

The term Cooperative Society denotes a society registered or deemed to be registered under the provisions of any law pertaining to co-operative societies for the time being in force in any State.

Also, it shall be considerate to take into the note that, if in case the words and expressions used in these regulations are not defined in the Act or in the provisions of the Companies (Specifications of Definitions Details) Rules 2014, then, in that case, they will have the same meaning as assigned to them in the Act or in the said regulations.

Change of the Place of Registered Office

If in case a producer company wants to change the place of its registered office from one state to another, then, in that case, provisions of Rules 27, 30, and 31 of the Companies (Incorporation) Rules 2014, together with the specified forms will become applicable for the purposed of change of office space.

Investment of General Reserves

Based on the provision of Rule 5 of the Producer Companies Rules 2021, a producer company will make the investment from and out of its GR (General Reserve) in any one of the combination as follows:

  • In approved securities, units, bonds, fixed deposits as issued by the Central Government or State Government or Scheduled Bank or Cooperative Societies;
  • In a Cooperative Bank, or Cooperative Land Development Bank, or State Cooperative Bank, or Central Cooperative Bank;
  • With any other Scheduled Bank, or;
  • In any of the Securities prescribed under the provisions of section 20 of the Indian Trusts Act 1882;
  • In the securities or shares of any other interstate cooperative society or any cooperative society, or;
  • In the securities, shares, or assets of PFIs (Public Financial Institutions) prescribed under clause (72) of section 2 of the Act;


In a nutshell, the provisions of the Producer Companies Rules 2021 will supersede the provisions of the Producer Companies (General Reserve) Rules 2003. Also, these amended regulations prescribe the definition of the term Cooperative Society and specify the rules concerning the change in registered office and Investment of General Reserves of Producer Companies.

Further, in case of any other doubt or issue, reach out to Swarit Advisors, our proficient and experienced Chartered Accountants, Company Secretaries, and Lawyers are ever ready to solve out your doubts and queries.

Official Copy of Producer Companies Rules 2021


Also, Read: Producer Company Compliance

Spread the love

Shivani has completed her B com LLB (Hons) and has the experience of writing various research papers during her college time. Earlier she was working as an Associate in a Delhi based Law Firm, but her interest in writing made her pursue Legal Content Writing as a career. Her core area of interest is in writing about various legal enactments, tax, and finance.


Related Articles

Export Rice From India
| Date: Jan 07, 2021 | Category: Business, IEC

Export Rice From India: Concept and Licenses Required

In India, agriculture acts as one of the main occupations. About 58% of the total population depends upon this to earn their source of living. Therefore, it is one of...

Read More
Start a Retail Shop in India
| Date: Dec 17, 2020 | Category: Business

Start a Retail Shop in India: Factors & Licenses to Consider

The term “Retail Business” denotes the purchase of finished goods from the producers or manufacturers and selling them further to customers. Further, India ranks at the top position in the...

Read More
Make Members in Nidhi Company
| Date: Jan 19, 2021 | Category: Nidhi Company

Is it Possible to Make Members in Nidhi Company: Step by Step Guide

A Nidhi Company is an NBFC (which does not required RBI approval) that works for its members by accepting deposits and lending funds. One of the most important criteria of...

Read More


Hi! My name is Akanksha! Let's talk.