Board may, subject to the provisions made in articles, provide
financial assistance to the Members of the Producer Company by way of-
Credit facility, to any Member, in connection with the business of the
Producer Company, for a period not exceeding six months;
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 relative shall be granted only after the approval by the
Members in general meeting.
581ZL. Investment in other companies formation of subsidiaries, etc.-
The general reserves of any Producer Company shall be invested to
secure the highest returns available from approved securities, fixed
deposits, units, bonds issued by the Government or co-operative or
scheduled bank or in such other mode as may be prescribed.
(2) Any Producer Company may, for promotion of its objectives acquire the shares of another Producer Company.
Any Producer Company may subscribe to the share capital of, or enter
into any agreement or other arrangement, whether by way of formation of
its subsidiary company, joint venture or in any other manner with any
body corporate, for the purpose of promoting the objects of the Producer
Company by special resolution in this behalf.
(4) Any Producer
Company, either by itself or together with its subsidiaries, may invest,
by way of subscription, purchase or otherwise, shares in any other
company, other than a Producer Company, specified under sub-section (2),
or subscription of capital under sub-section (3), for an amount not
exceeding thirty per cent, of the aggregate of its paid-up capital and
free reserves: Provided that a Producer Company may, by
special resolution passed in its general meeting and with prior approval
of the Central Government, invest in excess of the limits specified in
(5) All investments by a Producer Company may be
made if such investments are consistent with the objects of the Producer
(6) The Board of a Producer Company may, with the
previous approval of Members by a special resolution, dispose of any of
its investments referred to in subsections (3) and (4).
Producer Company shall maintain a register containing particulars of
all the investments, showing the names of the companies in which shares
have been acquired, number and value of shares; the date of acquisition;
and the manner and price at which any of the shares have been
subsequently disposed of.
(8) The register referred to in
sub-section (7) shall be kept at the registered office of the Producer
Company and the same shall be open to inspection by any Member who may
take extracts therefrom.
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