Application of provisions relating to private companies (Section 581ZR) :

All the limitations, restrictions and provisions of this Act, other than those specified in this part, applicable to a private company, shall, as far as may be, apply to a producer company, as if it is a private limited company under this Act in so far as they are not in conflict with the provisions of this Part. Although, the status of a producer company shall be that of a private company, strictly speaking, it cannot be construed as a private company in terms of section 3(1)(iii) of the Companies Act, 1956 which defines a private company. In terms of its maximum member as in the case of private company, producer company need not limit the number of members to 50. In terms of restriction on the transfer of shares, a producer company shall be restricted as provided in sections 581ZD(ii) and (iv). Besides, it need not have a minimum paid up capital of Rs. 1 lakh. It shall also not possible for a producer company to make any invitation to the public for subscription of any shares or debentures of the company or accept any invitation of deposits.