Minimum Turnover for GST before Application
27 Feb, 2024
In 2002, the Producer Company idea was introduced. The provisions of the Companies Act 1956 govern Producer Companies. Section 465(1) of the Companies Act 2013 states that the provisions of the Companies Act 1956 apply mutatis mutandis to a Producer Company.
Producer Companies are legal entities that must be registered as Producer Companies under the Companies Act of 1956. Section 581B requires the Company to have objectives or activities. Certain purposes listed in the Act Producer Companies can be included, such as production, harvesting, promoting mutuality approaches, and so on.
The attributes or basic features of a Producer Company are as follows:
Producer Company & its subsidiary company's above-audited balance statement, profit and loss accounts, and director's report should include the following:
Within two months from the last date of the Annual General Meeting, every producing Company must file the proceedings of the Annual General Meeting, along with the Director's Report, the audited Balance Sheet, and the profit and loss account, with the Registrar.
Section 581F (a) : The name of the concerned company shall end with the suffix Producer Company Limited.
Section 581P : Minimum of five directors & Maximum number of directors: 15 For a period of one year beginning on the date of its establishment as a Producer Company, an inter-state co-operative society created as a Producer Company may have more than 15 directors.
Section 581P (2) : The procedure of electing directors must be completed within three months of the Producer Company's registration. Furthermore, the Inter-State Co-operative Society formed as a Producer Company can benefit since 365 days have been replaced for the 90-day term offered to other firms.
Section 581P (6) : Both expert directors and extra directors may be appointed, but the overall number of directors subject to the Article of Association shall not exceed one-fifth of the total number of available directors (articles of association.) Furthermore, such expert directors will not be able to vote in the election of a chairman, but they will be eligible to be elected as a Chairman.
Section 581C(5) : The Producer Company will transform into a corporate entity, similar to a private limited company, after gaining registration under Section 581 C (1), to which all of the provisions listed in this Part apply. Furthermore, this corporation cannot become or be construed to become a public limited company.
Section 581ZB Section 581ZC Section 581ZD : The Producer Company will only have equity share capital. All active members may have unique privileges if the Articles provide for it. This company's shares will not be transferable. Furthermore, shares with special rights may be transferred to another active member with the Board's agreement. Each member of the producing company must designate someone within three months of becoming a member of the stated Company. Furthermore, upon the death of the member, the candidate nominated shall get all advantages and privileges. If the nominee is not a producer, the Board may demand that the nominee surrender his shares.
Section 581H- MoA Section 581I- AoA : The MOA & AOA of the concerned firm can be changed after adopting a Special Resolution, but the changes must not be conflicting with the provisions listed in Section 581B. Moreover, any modifications to the Articles must be suggested by not less than two-thirds of the overall elected directors or by not less than one-third of the total Members and must be approved by special resolution. Within thirty days of adoption, a copy of the amended Memorandum of Association or Articles of Association, as well as a copy of the special resolution voted, must be filed with the Registrar.
Section- 581ZA & Section 581 S & Section- 581Y : The first and foremost Annual General Meeting must be held within 90 days of the company's establishment date. The Registrar of Companies may grant an extension of time for having an Annual General Meeting (but not the first annual general meeting) for a term not exceeding three months. The Producer Company is expected to have an Annual General Meeting each year; at most, fifteen months must occur between one Annual General Meeting and the next. The AGM may only be called with at least 14 days' notice. The proceedings of each Annual General Meeting, along with the Directors' Report, the audited Balance Sheet, and the Profit and Loss Account, must be submitted to the appropriate Registrar within 60 days after the AGM. The shareholders will have certain unique rights that may only be exercised at the Annual General Meeting. These rights include budget approval, yearly account adoption, bonus share issuance, patronage bonus approval, and declaration of the limited return Regarding the choice of patronage distribution, Specify the circumstances, terms, and restrictions of any loans that the Board may make to any of the directors; and Approval of any transaction of the type specified in the articles for Member approval. Quorum: - One-quarter of the overall number of members
Section 581V : The board must assemble at least once every three months, and at least four such sessions must be held each year. The Chief Executive must offer at least seven days' notice for the board meeting. Meetings can also be convened with less notice, but the Board must document the reasons for doing so. Quorum: - One-third of the total number of Directors, subject to a minimum of three. Penalty: If the Chief Executive fails to comply with the regulations about sending the notice, he would face a maximum punishment of Rs 1000.
Section 581W: Every production business must have a full-time Chief Executive, who the Board selects from among people other than the members.
Section 581X: Every Producer Company with average annual revenue of more than Rs. 5 crores in each of the last three fiscal years must hire a full-time Company Secretary. Penalty for failing to appoint: Both the Company and each officer who is in default shall be fined Rs. 500/- for each day that the abovementioned default persists.
Section 581ZF: Every Producer Company's accounting must be audited internally. A Chartered Accountant shall perform the same at the intervals and in the manner provided in the articles.
Section 581ZI : In addition to the Reserves provided in the Articles, every Producer Company is expected to keep a general reserve for each year. If the company does not have sufficient cash in any fiscal year to maintain the reserves as required in the articles, the contribution to the reserve should be split among all Members in proportion to their participation in the company's related operations in that fiscal year.
A Producer Corporation is a company created with the intention of engaging in any activity related to or related to the primary production. A Producer Company, in other words, is a company founded with the primary goal of producing, harvesting, procuring, grading, pooling, handling, marketing, selling, and shipping of primary produce of the members, or importing commodities or services for their advantage.