The ministry of corporate affairs introduced a new part IXA, which is divided into 12 chapters and comprises 46 sections, numbered as 581A to 581Z and 581ZA to 581ZT. This amendment has allowed primary producers to gain maximum profit from the market-oriented economy. A hybrid between a cooperative society and a private limited company is called a producer company.
A corporate body that is registered as a producer company under Companies Act, 2013 carries out activities like production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, Import of goods, or export of primary produce, or any other services for their benefit. The production company also performs activities like training, education, research and development, consultancy service, and any other activities which promote the interest of the members of the producer company. Any Activities which conserve and communicate and are relatable to primary products like transmission and distribution of power or water resources Come under producer company. Financial services, welfare measures, insurance of produces, and promoting mutual assistance are measures that are carried out in a producer company.
The members of producer companies must be primary producers and people who can engage or participate in the owners have to be related 2, are connected with the primary producers. the name of the producer company must end with the words producer company limited and for the application of law and for the proper administration of the producer company it will behave like a private limited company. Even if it behaves like a private limited company, the producer company will have to comply with the specific provisions of part IXA.
Section 581 C (1) Provide for registration of the producer company where it becomes a body corporate and acts as if it is a private limited company. It will need ten or more producers, or two or more producer institutions all the combination of both to Incorporate as a producer company. There should be at least 5 I’m not more than 15 directors in the producer company and the board must appoint a CEO. An election will be conducted within 90 days if any director resigns from their post. The directors can be reappointed under eligible to do so. The tenure of the director is a maximum of 5 years and he should hold his office for at least one year. The election takes place in the annual general meeting.
internal audits need to be carried out in intervals as specified by its articles, by a chartered accountant. It has to be in accord with the Article of Association.
A General Reserve should be maintained every financial year and, if there is a shortfall then the members have to contribute in proportion to their patronage in the business. A producer company can only act under the prescribed act.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.
