Members’ Benefit

• Members will initially receive only such value for the produce or products pooled and supplied as the directors may determine. The withheld amount may be disbursed later either in cash or in kind or by allotment of equity shares.
• Members will be eligible to receive bonus shares.
• There is a provision is for the distribution of patronage bonus (akin to dividend) after the annual accounts are approved — patronage bonus means payment out of surplus income to members in proportion to their respective patronage (not shareholding).

Tax Benefits

• Indian economy is basically an agrarian economy. More than two-thirds of the Indian population depends upon agriculture for their livelihood.
• The Indian Income Tax Act, 1961(“the IT Act”) specifically exempts tax on agricultural income under section 10(1). However, the exemption for such agricultural income shall sometimes vary depending upon the kind of agricultural activity carried on.

Loans and Investments

• The members of the Producer Company are primary producers, and thus, are in need of financial assistance from time to time. Hence, a special provision is made by the Act 61 of Producer Company of giving loans to its members. The Company can provide financial assistance to its members through.
• The credit facility, to any member, in connection with the business of the Company, for a period not exceeding six months.
• Loans and advances, against security mentioned in articles to any Member, repayable within a period exceeding three months but not exceeding seven years from the date of disbursement if such loans or advances.