PRODUCER COMPANIES

PRODUCER COMPANIES

Section 581A - “Producer Company" means a body corporate having objects or activities specified in section 581B and registered as Producer Company under this Act

Section 581B - The objects of the Producer Company shall relate to all or any of the following matters, namely:

     (a) production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit:

     (b) processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members;

     (c) manufacture, sale or supply of machinery, equipment or consumables mainly to its Members;

     (d) providing education on the mutual assistance principles to its Members and others;

     (e) rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members;

     (f) generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce;

     (g) insurance of producers or their primary produce;

     (h) promoting techniques of mutuality and mutual assistance;

     (i) welfare measures or facilities for the benefit of Members as may be decided by the Board;

     (j) any other activity, ancillary or incidental to any of the activities referred to in clauses (a) to (i) above;

     (k) financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) which include extending of credit facilities or any other financial services to its Members.

Formation of Producer Company and its registration- Section 581C

Any ten or more individuals, each of them being a producer or any two or more producer institutions, or a combination of ten or more individuals and producer institutions, desirous of forming a Producer Company having its objects specified in section 581B and otherwise complying with the requirements of this Part and the provisions of this Act in respect of registration, may form an incorporated Company as a Producer Company under this Act.

On registration under sub-section (1), the Producer Company shall become a body corporate as if it is a private limited company.

Membership and voting rights of Members of Producer Company - Section 581D

In a case where the membership consists solely of individual members, the voting rights shall be based on a single vote for every Member, irrespective of his shareholding or patronage of the Producer Company.

Benefits to Members - Section 581E

Every Member shall initially receive only such value for the produce or products pooled and supplied as the Board of Producer Company may determine, and the withheld price may be disbursed later in cash or in kind or by allotment of equity shares, in proportion to the produce supplied to the Producer Company during the financial year to such extent and in such manner and subject to such conditions as may be decided by the Board.

Every Member shall, on the share capital contributed, receive only a limited return

The surplus if any, remaining after making provision for payment of limited return and reserves referred to in section 581ZI, may be disbursed as patronage bonus, amongst the Members, in proportion to their participation.

Memorandum of Producer Company - Section 581F

Articles of association of Producer Company - Section 581G

Amendment of memorandum of Producer Company - Section 581H

Amendment of articles of Producer Company - Section 581I

Option to inter-State co-operative societies to become Producer Companies - Section 581J

Number of directors - Section 581O - shall have at least five and not more than fifteen directors

The share capital of a Producer Company shall consist of equity shares only – Section 581ZB(1)

Penalty for contravention – Section 581ZM