Producer company

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sakunthala devi

sakunthala devi (Querist)
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27 October 2013 please explain what is meant by producer company in simple understandable terms...

Ajay Mishra

Ajay Mishra (Expert)
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28 October 2013 Hi

INTRODUCTION

The Government of India through an amendment in the Companies Act, 1956 by the Companies (Amendment) Act, 2002 incorporating a new part IXA dealing with Producer Company in the Companies Act, 1956 based on the recommendations of the Y.K. Alagh Committee. The Amendment Act came into force w.e.f. 6th February, 2003 vide Notification no. 135(E) dated 5th February, 2003.The producer companies are incorporated with the Registrar of Company (RoC). The objective was to formulate a legislation that would enable incorporation of cooperatives as companies and conversion of existing.

STRUCTURE

Part IXA which was introduced by the Companies (Amendment) Act, 2002 in The Indian Companies Act, 1956 deal with Producer Company consist of twelve chapters and 46 sections covered from section 581A to 581ZT.

OBJECTS

Producer Company means a body corporate having objects or activities specified in section 581B and registered as a producer company under the Companies Act, 1956.
Every producer company should deal basically with the produce of its active member for carrying out any of its objects. The objects of the producer company, as per section 581B, may be relating to all or any of the following matters, namely:
(a) production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit :

Provided that the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution;

(b) processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members;

(c) manufacture, sale or supply of machinery, equipment or consumables mainly to its Members;

(d) providing education on the mutual assistance principles to its Members and others;

(e) rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interests of its Members;

(f) generation, transmission 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.

Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section.

Ajay Mishra

Ajay Mishra (Expert)
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28 October 2013 For more details, go to the following article:

https://www.caclubindia.com/articles/proceduration-for-formation-and-registration-of-producer-company-15827.asp#.Um4BFhenyVE

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