SHARE CAPITAL AND MEMBERS RIGHTS.

 

shares        581ZB. Share Capital and members rights.

  1. The share capital of a Producer Company consists of only equity shares.
  2. The shares held by Producer Company member, shall as far as may be, be in proportion to that company patronage
  3. 581ZC. Special User Rights:
  4. The producers who may be active members, if so provided in the articles, have special rights and the producer company may give appropriate instruments to them in respect of that special rights.
  5. The instruments issued by the producer company under sub-section (1) shall, after obtaining Board approval in that behalf,  be transferable to any other active Producer Company member.
  6. Explanation : For this section purposes, the expression ” special right” means any right relating to additional supply produce by the active member or any other right relating to his produce that may be conferred upon him by the board.
  7. 581ZD. Shares Transfer-ability and Attendant Rights:
  8. Save as otherwise provided in sub-section (2) to (4) the member shares of a member of a producer company shall not be transferable.
  9. A producer company member may, after obtaining the previous board approval, transfer the part of his shares or whole along with special rights at par value to an active Member.
  10. Every member shall within three months of becoming a Producer Company member, nominate, in the specified manner in the articles, a person to whom the producer company shares shall vest in his death event.
  11. The nominee shall, on the Member death, become entitled to all the rights in the Producer Company shares and that Company Board shall transfer the deceased member shares to his nominee.
  12. Provided that in that case where such nominee is not a producer, the Board shall direct the shares together surrender with special rights, if any, to the Producer Company at par value or such other value by the board as may be determined.
  13. Where the Producer board Company is satisfied that
  14. any Member has ceased to be a primary producer, or
  15. any member has not succeed to get back his qualifications as specified in the articles to be a Member.
  16. the Board shall direct shares surrender together with the special rights, if any, to the Producer Company at par value or such other values that are determined by the board.
  17. Provided that the board shall not direct such shares surrender unless the Member has been served with written notice and given an opportunity of being heard
  18. FINANCE, ACCOUNTS AND AUDIT.
  19. 581ZE. ACCOUNTS BOOK:
  20. Every Producer Company shall keep at its registered office account proper books with respect to-
  21. all sums of received money and by the Producer company expended and the matters in respect of which the expenditure and receipt take place;
  22. All the sales and goods purchase by the Producer Company;’
  23. The instruments of liability executed by or Producer Company behalf;
  24. The assets and the Producer Company liabilities;
  25. In case of a producer company engaged in production, manufacturing and processing, the particulars relating to materials utilization or labors or other costs items.
  26. The balance sheet and profit and producer company loss accounts shall be prepared as far as may be, in associated with the provisions contained in section 211.
  27. Internal Audit
  28. Every Producer Company shall have accounts internal audit carried out, at such interval and in such manner in articles as may be specified, by a Chartered accountant as defined in clause(b) of  sub-section (1) of section 2 od the Institute of Chartered Accountants Act, 1949 (38 of 1949).
  29. 581ZG. Auditor duties under this part
  30. Without prejudice to the provisions contained in section 227, the auditor shall report on the additional matters following relating to the producer company namely:-
  31. The debts amounts due along with bad debts particulars if any:
  32. The cash balance verification and securities;
  33. The assets and liabilities details
  34. All transactions which appear to be contrary to this Part provisions;
  35. The loans given to the directors by the producer company;
  36. Any other matter that may be considered necessary by the auditor.
  37. Subscriptions by the Producer Company or Donations.
  38. A producer company may, by special resolution, make subscription or donation to any institution or for the purposes of individual of
  39. Promoting the economic or social welfare of the Producer Members or general public or producers;
  40. Promoting the mutual assistance principles;
  41. Provided that all such donation aggregate amount and subscription in any financial year shall not exceed three percent of the producer company net profit in the financial year preceding immediately the financial year in which the subscription or donation was made;
  42. Provided further that no Producer Company shall make indirectly to any political party or directly or for any political purpose to any person any subscription or any contribution or make available any facilities including material or personnel.
  43. GENERAL AND OTHER RESERVES:
  44. Every Producer Company shall maintain every financial year general reserve in addition to any reserve maintained by it as may be in the articles specified.
  45. In a case where the producer company does not have sufficient funds in financial year to maintain the reserves for transfer as may be specified in the articles, the contribution to the reserve shall be shared in proportion to the patronage amongst the Members in that year in the business of that Company
  46. BONUS SHARES ISSUE:
    Any Producer Company may, upon the Board recommendation and resolution passing in the general meeting, bonus shares issues by capitalization of amounts from general reserves referred to in section 581ZI in proportion to the shares held on the date by the Members of the issue of such shares.
  47. LOANS TO INVESTMENTS AND MEMBERS:
    581ZK. Loans, etc to members 
  48. The Board may, subject to the provisions made in the articles, provide members financial assistance of the Producer Company by way of-
  49. a, credit facility, in connection with the Producer Company business not exceeding six months for a period;
  50. Advances and loans against specified securities in the articles to any Member, repayable exceeding three months within a period but not exceeding seven years from the disbursement date of advances or such loans.
  51. Provided that any loan or any director advance or his relative shall be granted only after the approval in general meeting by the members.
  52. 581ZL. Other Companies Investment, Subsidiaries Formation etc
  53. The reserve general of any Producer Company shall be vested to secure the available highest returns from the approved securities units, fixed deposits, issued bonds by the Government or cooperative of scheduled bank or  in such other mode that may be prescribed.
  54. Any Producer Company may for its objectives promotion acquires another producer company shares.
  55. Any Producer Company may subscribe to the share capital of , or enter into any other arrangement or any agreement whether by way of subsidiary company formation, joint venture or in any other manner with any body corporate, for the purpose of promoting the producer company objects in that behalf by the special resolution
  56. Any Producer Company either by itself or with its subsidiaries together, may invest, by subscription way, otherwise or purchase, in any other company shares, other than a Producer Company, specified under sub-section (2), or capital subscription under sub-section (3) for an amount not exceeding aggregate of its paid-up capital thirty percent and free-reserves.
  57. Provided that the Producer Company may, by passed special resolution in its meeting general and with the Central Government prior approval, investment in the excess limits specified in this section.

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