The Rights of the Deceased: Moral Rights Incidental to Copyright Law
- Vanshika Agrawal
- 2024-04-25
Contents hide
2 The Companies (Amendment) Bill, 2020
3 What are Producer Companies?
5 Formation Of Producer Company
8 Annual General Meetings (PART IV) SEC 378ZA
9 Benefits For The Members Sec 378e
10.1 Read About : GST Recent Amended Circulars and Orders
The Companies (Amendment) Bill, 2020 was introduced in Lok Sabha on 17 March 2020. By the Minister for Corporate Affairs, Ms. Nirmala Sitharaman, which was passed on 19 Sep 2020. On 22 Sep 2020, it was passed in Rajya sabha also. Basically, the bill made three changes
(1). It removes the penalty for certain offences
(2).It removes imprisonment in certain offences
(3). It reduces the amount of fine payable in certain offences
As there are no separate provisions under Companies Act, 2013 for the producer companies. Section 456 0f companies Act 2013 only states that producer companies will still be governed. By the same law as before which means by the companies act 1956. The provision of companies act, 1956 falling under part IXA, still governs the functioning of the producer company. The company amendment bill introduces a new chapter of producer companies after Section 378 of the Act as Chapter XXIA.
This chapter consists of Section 378A to Section 378ZU, which governsthe producer companies. The provisions of the Bill relating to producer companies are similar to those in the Companies Act, 1956. The main purpose behind the change is to insert a new chapter relating to producer companies, on the same lines as provisions under Companies Act, 1956. The core of the law remains same; it is just a new chapter create for provisions relate to producer companies in Companies Act, 2013. It was on the basis of recommendations by Expert Committee that the change is in respect of governance of producer companies.
A producer company may form for the production, marketing, export of primary produce of members and also for its processing packaging of produce of its members. The farmers and agriculturists come together or make an association to form acompany;basically it is a combination of both the cooperative organization and a company. Producer company is also legally recognize. The main objects of company are;
(1).Production, harvesting, export or import of primary produce of the members.
(2). Processing including preserving, drying distilling, brewing, venting, canning and packaging of produce of its members.
(3). Providing education on the mutual assistance principles to its members and others.
(4). Rendering services like technical, consultancy, training, research and development and all other activities for the promotion of the interest of its members.
(5). Insurance of producers or their primary producers.
(6). Promoting techniques of mutuality and mutual assistance.
(7).To enhance the standard of living and ensure that the income and profits are increase of the members.
Producers means any person engaged in any activities connected with or relatable to any primary produce.
Primary Producer includes
1. Producer of farmers arising from agriculture,animal’shusbandry, horticulture etc.
2. Producer of persons engaged in handlooms, handicrafts etc.
Producer institution means a producer company or any other institution having only producer or producers or company (producer)or companies as it members.
Any 10 or more individuals, being a producer or 2 or more institutions ( producer) or a combination of both, who wants to form a producer company may form an incorporated company as such having its objectives as specified in the Act. The minimum capitalrequired of in order to form a producer companyRs. 5, 00,000.
The ROC shall register the memorandum, articles and other documents based on the application applied for registration and issue a certificate of incorporation within 30 days of the receipt of the document for registration.
After registration the producer company shall deemed to be a private company limited by shares without any limit on the number of members.
Every producer company shall have minimum 5 and maximum 15 directors and in the case of inter – state co-operative society as a producer company, such company may have more than 15 directors for a period of 1 year from the date of its incorporation as producer company.
The directors are appoint by the members of producer company in their annual general meetings. The election of the directors shall conducted within 90 days of the registration of the company and in the case of inter – state co-operative, election should be conducted within 365 days.
A director shall hold the office for not less than one year but not more than 5 years and every director are eligible for re appointment who retires. Thearticles of the association of the producer company have to specify the period of appointment in it.
Usually the members of the producer company belong to lower income group and are not well settle off as they are merely primary producers. Keeping these things in mind the act provides legal provisions which gives permission to the producer companies to lend loan to their members, basically it is providing financial assistance to them by the following ways.
Credit facility- The company can provide credit to its member in respect of the business carried out by the company and the period of such credit will be for 6 months.
Loans and advances- The provisions of company law allow the producer company to lend loans to its members, these loans can be granted against security and the time period for the re-payment of the loan is of maximum7 years from the date of lending loan.
NABARD loans- It help the producer company by giving them loans and financial assistance so that they are able to work properly andthereby satisfy their needs.
Every producer company shall hold its 1st annual general meeting within 90 days from the date of its incorporation.
Not more than 15 months shall elapse between the date of one AGM of the producer company and the company and that of the next annual general meeting.
EXTENSION OF AGM; the register may permit the extension of time for holding of an AGM (not the first agm) by a period not exceeding 3 months.
Initially every member shall receive only such value of the produce or products polled orsupplied as is determined by the board of producer company. Company and the withheld price may be disbursed later in cash or in kind or by allotment of equity shares. Every such member shall be entitled to receive a limited return and may be allotted bonus shares.
The main purpose behind enacting the provisions of the producer company which are formed generally by the small farmers and agriculturists, specifically in the act like other companies, was to give them a easy way, to prosper and carry their business in a smooth and easy manner as compared to public companies which have to deal with thestrict legal provisions mentioned under Companies Act, 2013. The producer companies are given such relief because there aim of incorporation is to provide benefit to the farmers who belong to lower-income society and it seeks to contribute towards their general welfare.
(1) Manish P, Analyzing the Companies (Amendment) Bill, 2020 – Part I, Taxsutra Law street India (19 June 2020), http://www.lawstreetindia.com/experts/column?sid=380.
(2) Cleartax, Producer Company in India under Companies Act, 2013, Cleartax (5 June 2020), https://cleartax.in/s/producer-company-india#Benefits.
(3) https://taxguru.in/company-law/companies-amendment-act-2020.html
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