Formation of producer companies and conversion of co-operative societies into producer companies. In the existing scenario of economic activities in the country, it is generally felt that rural producers, whether individuals or co-operative societies, are at a disadvantage given their generally limited assets, resources, education and access to advanced technology. In the present circumstances it is therefore felt that if co-operative enterprises are to continue to serve rural producers, they require an alternative to the institutional form presently available under law.
A new form of company known as “Producer Company” can be formed by primary producers of products of agricultural and other cottage industries or by multi-state co-operative societies or a combination of these. The registration and maintenance of these companies will be in accordance with the provisions contained in part IX-A of the companies act 1956.
Applicability of other parts of the act to producer companies
In terms of section 581ZQ, the provisions of the said Part IX-A shall have effect notwithstanding anything inconsistent therewith contained in the companies act or in any other law. But insofar as the provisions of the other laws are not varied, they shall apply to a producer company. Further all the limitations, restrictions and provisions of the companies act other than those specified in part IX-A, applicable to a private limited company. It is applicable for a producer company as if it is a private limited company under this act insofar as they are not in conflict with the provisions of this part.
Important relaxation for a producer company
The producer company will be a private limited company but it will not be subject to the maximum limit of 50 members for a private limited company under the act as per section 3(1). There is no maximum number of members for a producer company.
Member means individuals of primary producers or producer institution (whether incorporated or not) admitted as a member of the producer company and who retains the documents required for continuance as such.
Mutual assistance principles means the following:
- The membership in the producer company shall be voluntary and available to producers of major produce as defined who can participate or avail of the benefits or services of the producer company and are willing to accept the duties of membership.
- Each member shall have a single vote irrespective of the shareholding unless otherwise provided.
- The producer company shall be administered by a board consisting of persons elected or appointed as directors and the board shall be accountable to the members.
- There shall be limited return on capital and the profits will be utilized for the interest of all concerned in accordance with the articles.
- Patronage means the use of the services offered by the company to its members by participation in its business activities.
- Producer means the use of the services offered by the producer company to its members by participation in its business registration activities.
- Produce of persons engaged in hand loom, handicraft and other cottage industries.
- Any product from an extra schemes that would promote any of the above activities or anything ancillary thereto.
- Any activity which is intended to develop the production of anything referred to in (i) to (iv) above.
- “Producer Company” means a body corporate having objects or activities as specified and registered as producer company under the act.
- “Withheld price” means part of the due and payable for goods supplied by any member to the producer company and as withheld by the private limited company for payment on a subsequent date.
Objects of a producer company
The objects of a producer company shall relate to any of the following activities and deal primarily with the produce of its active members in carrying out its objects, namely:
Production, harvesting, grading, procurement, grading, handling, pooling, marketing, handling, selling, export of the major produce of the members or import of goods or services for their benefits.
Processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of members.
Revitalization of land, generation, transmission and distribution of power, water resources, their use, conservation and communication relatable to primary produce.
Promoting techniques of parasitism and mutual helps.
Welfare measures or facilities for the benefit of members as may be decided by the board.
Promoting techniques of parasitism and mutual helps. The company registration may also been carried on a new business promotions.
Welfare measures or facilities for the benefit of members as may be decided by the board.
Any other activity, incidental or ancillary to any of the activities referred to in clauses (a) (i) or other activities which may promote the principles of mutuality and mutual assistance amongst the members in any other manner.
Financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) which includes extending credit facilities. The company registration in Coimbatore, consultants can also managed their business activities in various activities. The leading cities in Salem and Madurai registration consultants have also been achieved their targets in business participants.
