producer company
ravinder
(Querist) 10 July 2011
This query is : Resolved
respective seniors.........
1- my question is what is a producer company and is it different from other compnies under companies ACT...?
2- is there any difference between producer company and nidhi company ....because it seems that they both are societies by their very nature ....?
prabhakar singh
(Expert) 10 July 2011
The affairs of establishing and working of a company in India is governed by the prevailing company laws as given in the Companies Act, 1956. A new form of company, which is called as a Producer Company is recognized under the Companies Act, 1956, since 2002.
The few basic features of a Producer Company are:
The minimum number of members comprising a producer company is 10 and no limit has been set for maximum number of members.
It shall be formed as a ‘Private Company’.
It is not mandatory to use the word ‘Private’ as part of the name.
It shall provide a platform to cooperative organizations to willfully convert themselves into a ‘Producer Company.’
The Companies Act: Appointment of Directors of a Producer Company
Company laws require that a Producer Company shall have at least 5 and at most 15 directors. As per section 581-P, of the Companies Act, 1956, the first board of directors of a Producer Company shall have at least 5 directors selected by the members, by whom the Memorandum and the Articles are signed. The affairs of the company shall be governed by these directors until more directors are appointed in compliance the provisions of section 581-P (1) of the Companies Act, 1956.
The following are some important conditions for appointment of the directors of a Producer Company are:
Election of Directors
As per the provisions of section 581-P (1) of the Companies Act, 1956, the directors of a Producer Company shall be elected within a period of 90 days from the date of registration of the company.
Tenure of Directors A person acting as director of a Producer Company shall hold office of a director for a minimum period of 1 year and for a maximum period of 5 years.
Eligibility of Directors
Under the provisions of section 581-P (4) of the Companies Act, 1956, a person who retires from the position of a director in compliance with the Articles, is eligible for re-appointment as a director.
Nidhi company is a company registered under Companies Act and notified as a nidhi company by Central Government under Section 620-A of Companies Act. It is a non-banking finance company doing the business of lending and borrowing with its members or shareholders.
