A producer company can be defined as a legally recognized body of farmers/ agriculturists with the aim to improve the standard of their living and ensure a good status of their available support, incomes and profitability. Under Companies Act 1956, a Producer Company can be formed by 10 individuals (or more) or 2 institutions (or more) or by a combination of both (10 individuals and 2 institutions) having their business objective

The Companies Act describes a Producer as "any person engaged in any operation connected with or linked to any primary produce" (Produce: "things produced or grown, particularly by farming"). A Producer Company is therefore a legal entity with one or more of the following objects:

The process of registering a Producer Company is similar to that of a Private Limited Company. Digital Signature (DSC) and Director Identification Number (DIN) must be obtained first for the proposed first Directors of the company. Once, Digital Signature (DSC) and Director Identification Number (DIN) are obtained, an application for name reservation is to be filed with the relevant Registrar of Companies (ROC).

If the Registrar is pleased with the Producer Company's incorporation proposal, he or she will approve it and grant a Certificate of Incorporation. When created, a production corporation will act in the same way as a private limited company, subject to certain restrictions. A Producer Corporation, on the other hand, would not have a cap on the number of shareholders, unlike a Private Limited Company. Furthermore, despite the fact that the name of a Producer Corporation ends with the words "Producer Limited Company," it shall not constitute or be considered to become a public limited company in any circumstances.