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THE COMPANIES (AMENDMENT) ACT, 2002

Title : THE COMPANIES (AMENDMENT) ACT, 2002

Year : 2002



581ZB. Share capital .-

(1) The share capital of a Producer Company shall consist of equity shares only.

(2) The shares held by a Member in a Producer Company, shall as far as may be, be in proportion to the patronage of that company.

581ZC. Special user rights .-

(1) The producers, who are active Members may, if so provided in the articles, have special rights and the Producer Company may issue appropriate instruments to them in respect of such special rights.

(2) The instruments of the Producer Company issued under sub-section (7) shall, after obtaining approval of the Board in that behalf, be transferable to any other active Member of that Producer Company.

Explanation
.-For the purposes of this section, the expression "special right" means any right relating to supply of additional produce by the active Member or any other right relating to his produce which may be conferred upon him by the Board.

581ZD. Transfer ability of shares and attendant rights .-

(1) Save as otherwise provided in sub-sections (2) to (4), the shares of a Member of a Producer Company shall not be transferable.

(2) A Member of a Producer Company may, after obtaining the previous approval of the Board, transfer the whole or part of his shares along with any special rights, to an active Member at par value.

(3) Every Member shall, within three months of his becoming a Member in the Producer Company, nominate, in the manner specified in articles, a person to whom his shares in the Producer Company shall vest in the event of his death.

(4) The nominee shall, on the death of the Member, become entitled to all the rights in the shares of the Producer Company and the Board of that Company shall transfer the shares of the deceased Member to his nominee:

Provided that in a case where such nominee is not a producer, 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.

(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.

Last updated on July, 2016

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