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25 Cards in this Set
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Legal references
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Part IX A of Companies act 1956
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Formation of Producer company
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Section 581C
Application by 1. 10 or more individuals who are producers or. 2. 2 or more producer institutions or. 3. combination of 10 or more individuals and producer institutions. Application to ROC |
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ISCS TO PRODUCER COMPANY
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Section 581J
Special resolution to be passed by atleast 2/3rd of the members of the society. |
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Amendment to MOA
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Pass SR to amend Object clause
Amendment cannot be inconsistent with section 581B file copy of amended MOA and SR duly certified by atleast 2 directors with ROC within 30 days of passing such SR. |
Objects clause
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Amendment of MOA
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Registered office from jurisdiction of one ROC To another ROC: pass SR
Copy of SR, amended MOA to be filed with both he ROCs signed by atleast 2 directors within 30 days from date of passing such SR. ROC old transfer all documents and records of company to new ROC Transfer of registered office from one state to another shall not be effective until it is confirmed by CLB |
situation clause
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Amendment of AOA
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Amendment proposed by atleast 2/3rd of directors or 1/3rd of members.
Amendment to be adopted by members in GM by passing SR Copy of SR and amended AOA certified by atleast 2 directors to be filed with ROC within 30 days from date of passing SR. |
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Directors of Producer company: Number
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Minimum 5
Maximum 15 In case of a producer company formed by conversion of ISCS into producer company all directors even if exceeding 15 shall continue for a period of 1 year from the date of transformation |
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Appointment of directors
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First directors: atleast 5 to be mentioned in MOA as first directors to manage affairs of company till the election of directors.
Election of directors: to be held within 90 days from date of incorporation of company In case of a producer company formed as per section 581J and having atleast 5 directors holding office as on date of transformation: election of directors to be held within 365 days from the date of registeration of company. |
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Tenure of directors
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As decided by articles
But Minimum 1 year Maximum 5 years |
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Expert directors
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The Board can coopt expert director or additional director.
No. of expert director and additonal directors to be restricted to 1/5th of total no. of directors. No voting rights to such directors in election of Chairman. Maybe elected as Chairman if articles provide so. |
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Board Meetings of Producer company
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Minimum 1 every quarter.
and Minimum 4 each calendar year. Notice of BM to every director in india at usual address. length of notice: 7 days prior BM date or shorter notice: record reasons in BM |
Number-notice-length
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Board meetings of Producer company: quorum
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1/3 rd of the total no.of directors
or 3 whichever is higher. |
Quorum
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Secretary of Producer company
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Wholetime secretary who is member of ICSI is required to be appointed if
Average annual turnover exceeds 5 crores rs. in each of the 3 consecutive financial years. |
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Director vacation of office producer company
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Moral turpitude offence conviction + 6 months imprisonment minimum.
Default in repayment of loan taken by director from a producer company in which he is a director. Default by the producer company in repayment of any loan to any person and such default continues for a period of 90 days or more. Default by producer company in filing annual accounts & annual returns for a period of 3 consecutive financial years. or Repayment of deposits, Withheld price, patronage bonus or interest which has become due and the default continues for a period of 1 year or more. AGM OR EGM is not held as per the provisions except where it could not be held due to natural calamity or such other reasons. |
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Voting rights producer company
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All members- Indivduals
or Members: Individuals as well as producer institution: One member one vote. All members- producer institutions only: First year- voting rights on the basis of shareholding Second year onwards- voting rights on the basis of Patronage in preceding financial year. |
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AGM of producer company
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First AGM to be held within 90 days of registeration of company.
One AGM in each financial year. Time Elapsed between 2 AGMs shall not exceed 15 months. Quorum of AGM 1/4th of total no. of members. higher limit for quorum may be set by articles. |
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Surrender of Shares
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Board sends written notice to member demanding surrender of shares and gives opportunity of being heard.
case 1. board is satisfied that the member has ceased to be a primary producer case 2. the board is satisfied that the member has failed to meet the qualifications required to be a member as provided in the articles |
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Donations by producer company
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Purpose for which donation or subscription can be made:
1. promotion of social and economic welfare of producer members or producer general public. 2. promotion of mutual assistance principles. Prohibition on political contributions: contribution to political party contribution to any person for political purposes Ceiling limit on donations: 3% of the net profits of the producer company in the preceding financial year. |
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Loans to members by producer companies
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Approval of board required
Compliance with the provisions of articles relating to loans if any Credit facility in relation to business of the producer company can be offered for a period not exceeding 6 months by producer company to member Loan properly secured by security specified in the articles for a period exceeding 3 months but not 7 years can be given by producer company to member. |
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Loan to directors
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Loans to directors or relatives cannot be sanctioned by the BOD even if they are authorised to do the acts that a company can do.
Approval of members in GM required. The terms and conditions, quantum should also be decided in AGM. The auditor of producer company has to report on the details of the loans given to directors in audit report. |
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Investments by Producer company
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Investment in bonds and securities issued by CG SG or scheduled banks
Investments in the prescribed securities under section 20 of Indian Trusts Act 1882 Investments in multi state cooperative societies or other cooperative socities. The producer company can buy shares of another producer company. The producer company can invest upto 30%(paid up capital and free reserves) in the shares of a non producer company. For an investment exceeding such limits: SR in GM Prior approval of CG for disposal of investments: BOD shall require prior approval of members |
Prescribed modes
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Cancellation of registeration of producer company by ROC
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If company fails to commence operations within 1 year from date of incorporation
If company has ceased to transact business with members if ROC on enquiry finds that the company is not Carrying on its objects as per Section 581B. |
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Appeal against order of Cancellation
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Member aggrieved by ROCs order pf cancellation shall file an appeal against it within 60 days from the date of passing of order with CLB
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Reconversion of Producer company into MSCS
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Application to high court
by members representing 2/3rd of members present and voting or Creditors representing 3/4th in value of total creditors Reconversion scheme to be approved by Members representing 3/4th in value of members present and voting or Creditors representing 3/4th in value of creditors present and voting Application to Registrar of MSCS to get registered as MSCS within 6 months of date of order passed by HC. |
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Transferability of shares
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Previous approval of Board
Transfer to active member of producer company. Tranfer at par value. Transfer of whole or part of the shareholding. |
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