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
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 the 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 the 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 governs the 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 the Companies Act, 1956. The core of the law remains the same; it is just a new chapter being created for provisions related to producer companies in the Companies Act, 2013. It was on the basis of recommendations made by the Expert Committee that the change is being brought in respect of governance of producer companies.
A producer company may be formed for the production, marketing, export of primary produce of members, and also for its processing packaging of the produce of its members. The farmers and agriculturists come together or make an association to form a company; basically, it is a combination of both the cooperative organization and a company. The producer company is also legally recognized. The main objects of the 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 the 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 increase of the members.
Producers mean 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 husbandry, horticulture, etc.
2. Producer of persons engaged in handlooms, handicrafts etc.
A producer institution means a producer company or any other institution having only producer or producers or company (producer)or companies as its 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 capital required in order to form a producer company of Rs. 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 deem to be a private company limited by shares without any limit on the number of members.
Every producer company shall have a minimum of 5 and maximum of 15 directors and in the case of interstate 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 a producer company.
The directors appointed by the members of the producer company in their annual general meetings. The election of the directors shall conduct within 90 days of the registration of the company and in the case of inter-state co-operative, the 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 a 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 give 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 the lending loan.
NABARD loans- It helps the producer company by giving them loans and financial assistance so that they are able to work properly and thereby 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 product or product poll supply. As, determined by the board of producer company. Company and the withheld price may disburse later in cash or in-kind or by allotment of equity shares. Every such member shall entitle to receive a limited return and maybe allotted bonus shares.
The main purpose behind enacting the provisions of the producer company which are form generally by the small farmers and agriculturists. Specifically in the act like other companies, was to give them an easy way. To prosper and carry their business in a smooth and easy manner as compared to public companies. Which have to deal with the strictly legal. Provisions mentioned under the Companies Act, 2013.
The producer companies are given such relief because their 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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