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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... " means a person or Producer Institution (whether incorporated or not) admitted as a Member of a Producer Company and who retains the qualifications necessary for continuance as such; (f) "mutual assistance principles" means the principles set out in sub-section (2) of section 378G; (g) "officer" includes any director or Chief Executive or Secretary or any person in accordance with whose directions or instructions part or whole of the business of the Producer Company is carried on; (h) "patronage" means the use of services offered by the Producer Company to its Members by participation in its business activities; (i) "patronage bonus" means payments made by a Producer Company out of its surplus income to the Members in proportion to their respective patronage; (j) "primary produce" means - (i) produce of farmers, arising from agriculture (including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, re-vegetation, bee raising and farming plantation products), or from any other primary activity or service which promotes the interest of the farmers or consumers; or (ii) produce of p .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... ransmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce; (g) insurance of producers or their primary produce; (h) promoting techniques of mutuality and mutual assistance; (i) welfare measures or facilities for the benefit of Members as may be decided by the Board; (j) any other activity, ancillary or incidental to any of the activities referred to in clauses (a) to (i) or other activities which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner; (k) financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) which include extending of credit facilities or any other financial services to its Members.’’. (2) Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section. Formation of Producer Company and its registration 378C. (1) Any ten or more individuals, each of them being a producer or any two or more Producer Institutions, or a combination of ten or more individuals and Producer Institutions, desir .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... oting rights shall be computed on the basis of a single vote for every Member. (2) The articles of any Producer Company may provide for the conditions, subject to which a Member may continue to retain his membership, and the manner in which voting rights shall be exercised by the Members. (3) Notwithstanding anything contained in sub-section (1) or sub-section (2), any Producer Company may, if so authorised by its articles, restrict the voting rights to active Members, in any special or general meeting. (4) No person, who has any business interest which is in conflict with business of the Producer Company, shall become a Member of that Company. (5) A Member, who acquires any business interest which is in conflict with the business of the Producer Company, shall cease to be a Member of that Company and be removed as a Member in accordance with the articles. Benefits to Members. 378E. (1) Subject to the provisions made in articles, every Member shall initially receive only such value for the produce or products pooled and supplied as the Board of Producer Company may determine, and the withheld price may be disbursed later in cash or in kind or by allotment of equity shares, in propo .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... , can participate or avail of the facilities or services of the Producer Company, and are willing to accept the duties of membership; (b) each Member shall, save as otherwise provided in this Chapter, have only a single vote irrespective of the shareholding; (c) the Producer Company shall be administered by a Board consisting of persons elected or appointed as directors in the manner consistent with the provisions of this Chapter and the Board shall be accountable to the Members; (d) particulars on limited return on share capital; (e) the surplus arising out of the operations of the Producer Company shall be distributed in an equitable manner by- (i) providing for the development of the business of the Producer Company; (ii) providing for common facilities; and (iii) distributing amongst the Members, as may be admissible in proportion to their respective participation in the business; (f ) provision for the education of Members, employees and others, on the principles of mutuality and techniques of mutual assistance; (g) the Producer Company shall actively co-operate with other Producer Companies (and other organisations following similar principles) at local, national or internati .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... he company; (m) the basis and manner of distribution and disposal of funds available after meeting liabilities in the event of dissolution or liquidation of the Producer Company; (n) the authorisation for division, amalgamation, merger, creation of subsidiaries and the entering into joint ventures and other matters connected therewith; (o) laying of the memorandum and articles of the Producer Company before a special general meeting to be held within ninety days of its registration; (p) any other provision, which the Members may, by special resolution recommend to be included in the articles. Amendment of memorandum. 378H. (1) A Producer Company shall not alter the conditions contained in its memorandum except in the cases, by the mode and to the extent for which express provision is made in this Act. (2) A Producer Company may, by special resolution, not inconsistent with section 378B, alter its objects specified in its memorandum. (3) A copy of the amended memorandum, together with a copy of the special resolution duly certified by two directors, shall be filed with the Registrar within thirty days from the date of adoption of any resolution referred to in sub-section (2): Provid .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... e words "Producer Company Limited" shall form part of its name with any word or expression to show its identity preceding it. (4) On compliance with the requirements of sub-sections (1) to (3), the Registrar shall, within a period of thirty days of the receipt of application, certify under his hand that the inter-State co-operative society applying for registration is registered and thereby incorporated as a Producer Company under this Chapter. (5) A co-operative society formed by producers, by federation or union of co-operative societies of producers or co-operatives of producers, registered under any law for the time being in force which has extended its objects outside the State, either directly or through a union or federation of co-operatives of which it is a constituent, as the case may be, and any federation or unions of such co-operatives, which has so extended any of its objects or activities outside the State, shall be eligible to make an application under sub-section (1) and to obtain registration as a Producer Company under this Chapter. (6) The inter-State co-operative society shall, upon registration under sub-section (1), stand transformed into a Producer .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... h period, to such extent and in such manner as the circumstances may require. (6) Every organisation which was getting financial, managerial or technical assistance from the inter-State co-operative society, immediately before the date of transformation, may continue to be given financial, managerial or technical assistance, as the case may be, by the Producer Company, for such period, to such extent and in such manner as that company may deem fit. (7) The amount representing the capital of the erstwhile inter-State co-operative society shall form part of the capital of the Producer Company. (8) Any reference to the inter-State co-operative society in any law other than this Act or in any contract or other instrument, shall be deemed to be reference to the Producer Company. (9) If, on the date of transformation, there is pending any suit, arbitration, appeal or other legal proceeding of whatever nature by or against the inter-State co-operative society, the same shall not abate, be discontinued or be in any way prejudicially affected by reason of the incorporation of the Producer Company under section 378C or transformation of the inter-State co-operative society as a Producer Comp .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... employee of the inter-State co-operative society opts under sub-section (2) not to be in employment or service of the Producer Company, such officer or other employee shall be deemed to have resigned. (4) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947) or in any other law for the time being in force, the transfer of the services of any officer or other employee of the inter-State co-operative society to the Producer Company shall not entitle such officer or other employee to any compensation under this Act or under any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority. (5) The officers and other employees who have retired before the date of transformation from the service of the inter-State co-operative society and are entitled to any benefits, rights or privileges, shall be entitled to receive the same benefits, rights or privileges from the Producer Company. (6) The trusts of the provident fund or the gratuity fund of the inter-State co-operative society and any other bodies created for the welfare of officers or employees shall continue to discharge functions in the Producer .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... le for re-appointment as a director. (5) Save as otherwise provided in sub-section (2), the directors of the Board shall be elected or appointed by the Members in the annual general meeting. (6) The Board may co-opt one or more expert directors or an additional director not exceeding one-fifth of the total number of directors or appoint any other person as additional director for such period as the Board may deem fit: Provided that the expert directors shall not have the right to vote in the election of the Chairman but shall be eligible to be elected as Chairman, if so provided by its articles: Provided further that the maximum period, for which the expert director or the additional director holds office, shall not exceed such period as may be specified in the articles. Vacation of office by directors. 378Q. (1) The office of the director of a Producer Company shall become vacant if,- (a) he is convicted by a court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months; (b) the Producer Company, in which he is a director, has made a default in repayment of any advances or loans taken from any company or institution or .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... s of the Producer Company in the ordinary course of its business; (j) sanction any loan or advance, in connection with the business activities of the Producer Company to any Member, not being a director or his relative; (k) take such other measures or do such other acts as may be required in the discharge of its functions or exercise of its powers. (3) All the powers specified in sub-sections (1) and (2) shall be exercised by the Board, by means of resolution passed at its meeting on behalf of the Producer Company. Explanation.-For the removal of doubts, it is hereby declared that a director or a group of directors, who do not constitute the Board, shall not exercise any of the powers exercisable by it. Matters to be transacted at general meeting. 378S. The Board of Directors of a Producer Company shall exercise the following powers on behalf of that Company, and it shall do so only by means of resolutions passed at the annual general meeting of its Members, namely:- (a) approval of budget and adoption of annual accounts of the Producer Company; (b) approval of patronage bonus; (c) issue of bonus shares; (d) declaration of limited return and decision on the distribution of patronag .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... of the Board of Directors shall be given in writing to every director for the time being in India, and at his usual address in India to every other director. (3) The Chief Executive shall give notice as aforesaid not less than seven days prior to the date of the meeting of the Board and if he fails to do so, he shall be liable to a penalty of five thousand rupees: Provided that a meeting of the Board may be called at shorter notice and the reasons thereof shall be recorded in writing by the Board. (4) The quorum for a meeting of the Board shall be one-third of the total strength of directors, subject to a minimum of three. (5) Save as provided in the articles, directors including the co-opted director, may be paid such fees and allowances for attendance at the meetings of the Board, as may be decided by the Members in the general meeting. Chief Executive and his functions. 378W. (1) Every Producer Company shall have a full time Chief Executive, by whatever name called, to be appointed by the Board from amongst persons other than Members. (2) The Chief Executive shall be ex officio director of the Board and such director shall not retire by rotation. (3) Save as otherwise provided .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... f sub-section (1), the Company and every officer of the Company who is in default, shall be liable to a penalty of one hundred rupees for every day during which the default continues subject to a maximum of rupees one lakh: Provided that in any proceedings against a person in respect of a default under this sub-section, no penalty shall be imposed if it is shown that all reasonable efforts to comply with the provisions of sub-section (1) were taken or that the financial position of the Company was such that it was beyond its capacity to engage a whole-time secretary. Quorum. 378Y. Unless the articles require a larger number, one-fourth of the total membership shall constitute the quorum at a general meeting. Voting rights 378Z. Save as otherwise provided in sub-sections (1) and (3) of section 378D, every Member shall have one vote and in the case of equality of votes, the Chairman or the person presiding shall have a casting vote except in the case of election of the Chairman. PART IV GENERAL MEETINGS Annual general meetings. 378ZA. (1) Every Producer Company shall in each year, hold, in addition to any other meetings, a general meeting, as its annual general meeting and shall spec .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... d to vote in any general meeting, proceed to call an extraordinary general meeting in accordance with the relevant provisions contained in Chapter VII. (6) Every annual general meeting shall be called, for a time during business hours, on a day that is not a public holiday and shall be held at the registered office of the Producer Company or at some other place within the city, town or village in which the registered office of the Company is situate. (7) A general meeting of the Producer Company shall be called by giving not less than fourteen days prior notice in writing. (8) The notice of the general meeting indicating the date, time and place of the meeting shall be sent to every Member and auditor of the Producer Company. (9) Unless the articles of the Producer Company provide for a larger number, one-fourth of the total number of members of the Producer Company shall be the quorum for its annual general meeting. (10) The proceedings of every annual general meeting alongwith the report of the Board of Directors, the audited balance-sheet and the profit and loss account shall be filed with the Registrar within sixty days of the date on which the annual general meeting is held, w .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... h special rights, if any, to the Producer Company at par value or such other value as may be determined by the Board. (5) Where the Board of a Producer Company is satisfied that- (a) any Member has ceased to be a primary producer; or (b) any Member has failed to retain his qualifications to be a Member as specified in articles, the Board shall direct the surrender of shares together with special rights, if any, to the Producer Company at par value or such other value as may be determined by the Board: Provided that the Board shall not direct such surrender of shares unless the Member has been served with a written notice and given an opportunity of being heard. PART VI FINANCE, ACCOUNTS AND AUDIT Books of account. 378ZE. (1) Every Producer Company shall keep at its registered office proper books of account with respect to- (a) all sums of money received and expended by the Producer Company and the matters in respect of which the receipts and expenditure take place; (b) all sales and purchase of goods by the Producer Company; (c) the instruments of liability executed by or on behalf of the Producer Company; (d) the assets and liabilities of the Producer Company; (e) in case of a Pro .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... e sufficient funds in any financial year for transfer to maintain the reserves as may be specified in articles, the contribution to the reserve shall be shared amongst the Members in proportion to their patronage in the business of that Company in that year. Issue of bonus shares. 378ZJ. Any Producer Company may, upon recommendation of the Board and passing of resolution in the general meeting, issue bonus shares by capitalisation of amounts from general reserves referred to in section 378Z-I in proportion to the shares held by the Members on the date of the issue of such shares. PART VII LOANS TO MEMBERS AND INVESTMENTS Loan, etc., to Members. 378ZK. The Board may, subject to the provisions made in articles, provide financial assistance to the Members of the Producer Company by way of- (a) credit facility, to any Member, in connection with the business of the Producer Company, for a period not exceeding six months; (b) loans and advances, against security specified in articles to any Member, repayable within a period exceeding three months but not exceeding seven years from the date of disbursement of such loan or advances: Provided that any loan or advance to any director or his .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... , carries on business under any name which contains the words "Producer Company Limited", he shall be punishable with fine which may extend to ten thousand rupees for every day during which such name has been used by him. (2) If a director or an officer of a Producer Company, who wilfully fails to furnish any information relating to the affairs of the Producer Company required by a Member or a person duly authorised in this behalf, he shall be liable to imprisonment for a term which may extend to six months and with fine equivalent to five per cent. of the turnover of that Company during the preceding financial year. (3) If a director or officer of a Producer Company- (a) fails to hand over the custody of books of account and other documents or property in his custody to the Producer Company of which he is a director or officer; or (b) fails to convene annual general meeting or other general meetings, he shall be punishable with fine which may extend to one lakh rupees, and in the case of a continuing default or failure, with an additional fine which may extend to ten thousand rupees for every day during which such default or failure continues. PART IX AMALGAMATION, MERGE .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... on of conduct of the affairs of the Producer Company in future; (b) the purchase of shares or interest of any Members of the Producer Company by other Members or by the Producer Company; (c) the consequent reduction of its share capital, in case of purchase of shares of one Producer Company by another Producer Company; (d) termination, setting aside or modification of any agreement, howsoever arrived between the company on the one hand and the directors, secretaries and manager on the other hand, apart from such terms and conditions as may, in the opinion of the majority of shareholders, be just and equitable in the circumstances of the case; (e) termination, setting aside or modification of any agreement between the Producer Company and any person not referred to in clause (d): Provided that no such agreement shall be terminated, set aside or modified except after giving due notice to the party concerned: Provided further that no such agreement shall be modified except after obtaining the consent of the party concerned; (f) the setting aside of any transfer, delivery of goods, payment, execution or other act relating to property, made or done by or against the Producer Company wit .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... new Producer Companies are registered in accordance with the provisions of this Chapter, the registration of the erstwhile Producer Company shall stand cancelled forthwith and that Company shall be deemed to have been dissolved and cease to exist as a corporate body. (14) The amalgamation, merger or division of companies under the foregoing sub-sections shall not in any manner whatsoever affect the pre-existing rights or obligations and any legal proceedings that might have been continued or commenced by or against any erstwhile company before the amalgamation, merger or division, may be continued or commenced by, or against, the concerned resulting company, or merged company, as the case may be. (15) The Registrar shall strike off the names of every Producer Company deemed to have been dissolved under sub-sections (11) to (14). (16) Any member or creditor or employee aggrieved by the transfer of assets, division, amalgamation or merger may, within thirty days of the passing of the resolution, prefer an appeal to the Tribunal. (17) The Tribunal shall, after giving a reasonable opportunity to the person concerned, pass such orders thereon as it may deem fit. (18) Where an appeal ha .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... f the Producer Company, which shall thereupon cease to exist forthwith: Provided that no such order cancelling the registration as aforesaid shall be passed until a notice to show cause has been given by the Registrar to the Producer Company with a copy to all its directors on the proposed action and reasonable opportunity to represent its case has been given. (2) Where the Registrar has reasonable cause to believe that a Producer Company is not maintaining any of the mutual assistance principles specified, he shall strike its name off the register in accordance with the provisions contained in section 248. (3) Any Member of a Producer Company, who is aggrieved by an order made under sub-section (1), may appeal to the Tribunal within sixty days of the order. (4) Where an appeal is filed under sub-section (3), the order of striking off the name shall not take effect until the appeal is disposed of. Provisions of this Chapter to override other laws. 378ZQ. The provisions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in this Act or any other law for the time being in force or any instrument having effect by virtue of any such law; but the .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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..... ed copy of the order has been filed with the Registrar. (5) A copy of every such order shall be annexed to every copy of the memorandum of the company issued after the certified copy of the order has been filed as aforesaid, or in the case of a company not having a memorandum, to every copy so issued of the instrument constituting or defining the constitution of the company. (6) If default is made in complying with sub-section (4), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to one hundred rupees, for each copy in respect of which default is made. (7) The Tribunal may, at any time after an application has been made to it under this section, stay the commencement or continuation of any suit or proceeding against the company on such terms as the Tribunal thinks fit, until the application is finally disposed of. (8) Every Producer Company, which has been sanctioned re-conversion by the Tribunal, shall make an application under the Multi-State Co-operative Societies Act, 2002 (39 of 2002) or any other law for the time being in force for its registration as multi-State co-operative society or co-operative society, as th .....

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Section 52 - Insertion of new Chapter XXIA - The Companies (Amendment) Act, 2020

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