As per the Companies Act Minimum 10 individuals (Or More) or two or more producer institutions or by a combination of both (10 individuals and 2 institutions) can form a producer company with Minimum paid-up authorized capital is of Rs. 5 lakh. Members should be primary producers.
|Object||Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section [Sec. 581B (2)].
a) Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of Members
b) Processing the produce of Members (i.e.; preserving, drying, distilling, brewing, vinting, canning and packaging of produce of Members)
c) Manufacture, sale or supply of machinery, equipment or consumables to its Members
d) Providing education on the mutual assistance principles to its Members.
e) Rendering services – technical, consultancy, training, research and development.
f) Generation, transmission and distribution of power, revitalization of land and water resources.
g) Insurance of producers or their primary produce.
h) Welfare measures or facilities for the benefit of members.
i) Promoting mutuality and mutual assistance
j) Any- other activity, ancillary or incidental to any of the activities referred to in above clauses
k) Financing of procurement, processing, marketing or other activities specified in above clauses (i.e; extending credit facilities or any other financial services to its members)
|Memorandum Of Association||The Memorandum of the Company shall state the
I. Name (ending with producer company limited)
II. Situation Clause
III. Object Clause
IV. Liability Clause
V. Capital Clause
VI. Subscription Clause
|Article Of Association||The Articles of association provides
> Constitution of the Board of the company
> Functioning of the Board
> The procedure for conducting the meeting of the Board etc.
> Article Of association Amend by the passing special resolution. And amended article should be submitted with registrar within 30 days.
|No. Of Directors||
> Every Producer Company shall have minimum five and not more than 15 directors.
> The Director shall hold his office for a period not less than 1 year but not more than 5 years as may be specified in the articles.
> Every director shall be eligible for reappointment.
|Meetings of Board and quorum||
> Four Board meetings Should Be hold in every financial year
> The gap between two board meeting should not be less than 90 days
> The Chief Executive shall give notice to the Board of Directors at least 7 days before the date of meeting.
> Board Meeting can be hold on shorter notice
> The quorum for the Board meeting shall be one third of total of Directors or three whichever is higher .
> The directors may be paid such fees and allowances for attending board meeting , as may be decided by the Members in general meeting.
|No. Of Members||
> There is no celling On no. of members
|Annual general meeting and quorum||
> The Company has to conduct AGM once in a year.
> The first AGM shall be conducted within 90 days from the date of incorporation. The company can get extension up to 3 months from registrar.
> The gap between two AGM shall not exceed 15 months
> The notice of AGM shall be issued before 14 days.
> Every AGM shall be conducted during business hours.
> On a day that is not being a public holiday and shall be held at the registered office or other place within the city, town or village in which the registered office is situated.
> The quorum for AGM is one fourth of the total membership
> If Company Fails to convene AGM or other GM , shall be punishable with a fine up to Rs. 1 lakh. In case of continuous default additional fine up to Rs.10,000/- for every day during which the default continues.
> Every producer Company shall file the audited Balance sheet and the profit and loss account along with Director’s Report with Registrar within sixty days of the date of Annual General Meeting.
|Loan to members||The loans can be made to the Members in according to the articles of the Company after getting the approval form the Board.
In the Following Cases Loan Can Be made to The members.
a) A Member may be given credit facility in connection with the business of the Producer Company, for a period not exceeding 6 months.
b) loans can be made to members if the following conditions are satisfied
> The loan is secured by some security specified in the articles.
> The loan is repayable within a period exceeding 3 months but not exceeding7 years.
> Every producer company shall have a full time Chief Executive to be appointed by the Board amongst persons other than the members.
> He shall be ex officious director of the Board.
> He is not liable to retire by rotation.
> The qualifications, experience, tenure, terms and conditions of his appointment may be decided by the Board.
> He shall be entrusted with the substantial powers to handle day-to-day activities of the company.
> Every Producer Company, having annual turnover more than five crores in each of three consecutive financial years shall have a whole time Company Secretary.
> If the Producer Company fails the Company and every Officer-in-default shall be punishable of Rs. to 500/- for every day during which the default continues.
> If the member is an individual than Each member will have a single vote irrespective of the shares held by them
> If the member is institutions then Vote shall be determined on the participation in the business in the previous year
> Minimum paid-up authorized capital is of Rs. 5 lakh
> The Producer Company shall have only equity shares.
> The shares shall not be transferrable.
|Benefits to Members||
> Every member shall receive the value in proportion to the produce supplied to the company.
> Bonus shares issued by the company.
> Surplus Paid either in cash or equity.
> The shares having special rights may be transferred with the approval of the Board to another active member.
> Right to vote in general meeting
> Right to receive notice
> Right to inspect corporate documents
> Every member shall nominate a person within three months on becoming a member of the Company.
> After the death of member nominee will get benefits.
> Nominee must be a producer, if not then, the Board shall direct the nominee to surrender the shares.
|Occupation of the members||
> Occupation of the members must be a farmer of farmer related work.
|Accounts and Audit||
> Every Producer Company has to maintain books of accounts at its registered office.
> Auditor must be practicing chartered accountant. As per chartered accountant act,1949 .
|Duties of Auditor||
> The amount of debts due along with particulars of bad debts,
> The verification of cash balance and securities.
> The details of assets and liabilities.
> The loans given to the directors.
> The donations or subscriptions given by the Producer Company.
> Any other matter as may be considered necessary by the auditor.
> Every Producer Company shall have internal audit of its accounts at such interval and in such manner as may be specified in the articles.
> The internal auditor must be carried by a CA.
> Producer Company may issue a bonus shares on the recommendation of the Board and approval in the General meeting.
> Bonus shares may be issued by capitalization of amounts from General Reserve
> Producer Company is prohibited from making any contribution or subscription to any person for any political purpose.
> A Producer Company may, make a donation by passing special resolution, to any institution or individual for the purposes of promoting the social and economic welfare of the producer members or producers of general public not exceed 3% of the net profit.
> If any person carries on business under the name of the Producer Company he is liable for fine which may be extended up to Rs.10000/- for each day he uses the name.
> If a Director or an officer fails to furnish any information required by a member he shall be liable for imprisonment extend to six months and with fine equivalent to 5% of the turnover of that company during preceding financial year.
|Amalgamation, Merger or Division||
> A Producer Company may amalgamate or merge with other company by a special resolution.
> The resolution shall be passed by not less than two thirds of its Members present.
> The resolution shall not take effect until the expiry of one month or until the assent of the members and creditors has been obtained, whichever is earlier.
> The registration of amalgamated companies shall stand cancelled once the amalgamated company get registered.
> Any member or creditor or employee aggrieved by the transfer of assets may prefer an appeal within 30 days of passing the resolution to the High Court.
|Cancellation of registration of a producer company||The Registrar has the power to pass an order cancelling the registration of a Producer Company in the following cases:
> The Registrar has the power to pass an order cancelling the registration of a Producer Company in the following cases
> Where a Producer Company ceases to transact business with the Members
> Where the Registrar is satisfied that the Producer Company is no longer carrying on any of its objects specified u/s 581B
|Striking of name||
> Registrar has reasonable cause to believe that a Producer Company is not maintaining any of the mutual assistance principles.
> The Registrar shall strike off the name of the producer company.