Know what are the provisions for Changing a Director of a Producer Company

Last Updated On: Nov. 9, 2021, 11:30 p.m.



What is a Producer Company?

A Producer Company is a legally recognised body of agriculturist/farmers. Their aim is to improvise the standard of living and ensure a good status of their availability support,incomes and profitablility. 

The main objective of the producer company is to facilitate the formation of co-operative business as companies the formation of co-operative business as companies and find ways to convert the existing co-operative business into companies.

According to the Companies Act of 1956, a Producer Company can be formed by 10 or more individuals, 2 or more institutions or a combination of both having their business objectives as one of the following:






f.Grading or




This article will help you to know the legal procedure to change directors of a Producer Company.

Firstly, we will get to know who can be appointed as Director in a Producer Company

A Producer Company shall have a minimum of 5 and not more than 15 directors. In case of Inter-State Co-operative society functioning as Producer Company, such entity may have more than 15 directors during one year from the date of its incorporation of the company.


Conditions for appointment of Director of a Producer Company:

i. If the concerned Director has made some default in terms of tax liability or dividend, bonus while serving the directorship position in the previous Producer Company.

ii. If the concerned Director has been a criminal by the Court of Law for any crime involving moral turpitude & served a jail term of not less than six months.

iii. If the concerned Director has failed to comply with the provisions concerning Annual General Meeting.

iv. If the concerned Director has a criminal track record of repayment of a loan that continues to sustained equal or more than ninety days.

v. If the concerned Director has made repayment error against the loan availed from the Producer Company while serving the position of Directorship.



What are the Duties which Board posses in appointment/re-appointment of Director in a Producer Company:

a. The Director has to serve his/her duties for a timeline not less than one year and a maximum of 5 years.

b. Every Director shall be eligible for reappointment.

c. The number of such directors shall not surpass 1/5th the total number of directors in a producer company

d. The Directors of the company’s board are appointed by the member in the AGM (Annual General Meeting). The board has right to appoint one or more directors not surpassing 1/5th of the total number of directors. Such directors are liable to hold their position as mentioned in the provisions.

e. Board is liable to appoint a full-time chief executive and vest him/her with the substantial powers of management.

f. If any of the directors vacate his/her position via resignation, the reappointment shall be conducted within 90 days from the resignation date.




As per the Companies Act, 2013 Appointment and Re-appointment of Directors of Producer Company incurs a plenty of legal implications and you will be required to fill a prescribed forms set out by Ministry of Corporate Affairs. For more queries you can contact our professional.They will help you out in completing process easily.




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