The producer company can be formed by any 10 or more individuals, each of them being individuals or institutions. Its name shall bear the words “Producer Company Ltd.” and the liability of the members shall be limited by the memorandum. The objects of a producer company should be as specified in 581B, which contain 11 items. There need not be any conditions attached to articles to state that it is a private company.
The minimum and maximum number of directors of a producer company is 5 and 50. Their tenure is for a minimum period of 1 year and the maximum period of 5 years.
The Board can opt one or more directors or additional directors which cannot exceed 1/5th of the total number of directors. The period of such directors may be for any period. Vacation of the office of directors is provided in section 581Q and the powers have been mentioned in section 581R. The matters to be transacted by the Board only at general meeting are contained in section 581S. The liability of directors for their acts in contravention of the provisions of the Act shall be joint and several. Further, this liability shall be in addition to or not in derogation of a liability imposed under any other law.
3. General Meetings
The notice of the AGM shall comprise not only the agenda but also to include minutes of the previous AGM and EGM. It shall also contain the names of candidates for elections of office of the director including a statement of their qualifications. The notice of meeting is required to be given not less than 14 days and the quorum shall be 1/4th of the total members unless the articles provide for a higher number. The first AGM is required to be held within 90 days from the date of incorporation of the company.
4. Share Capital and Members Rights
The share capital of a producer company shall consist of equity shares only and a member shall hold shares in proportion to the patronage of that company. Active members shall have special rights and such shares are transferable to any other active member. The transferability is subject to prior or approval of the board and at par value. Nomination facility by members is mandatory. circumstances for cession of membership are provided. Irrespective of the shareholding one member shall have only one vote.
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