{"id":37263,"date":"2021-10-29T16:06:10","date_gmt":"2021-10-29T10:36:10","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=37263"},"modified":"2021-10-29T16:06:12","modified_gmt":"2021-10-29T10:36:12","slug":"provisions-for-changing-directors-of-producer-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/provisions-for-changing-directors-of-producer-company\/","title":{"rendered":"Know the Provisions for Changing Directors of Producer Company"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The notion of producer Company was introduced in India to enable cooperatives to operate as a corporate establishment under the Ministry of Corporate Affairs. In legal parlance, the producer company refers to a corporate body having an object cited in section 581B &amp; functioning as a <a href=\"https:\/\/corpbiz.io\/producer-company-registration\"><strong>Producer Company<\/strong><\/a> under the Companies Act, 1956. This write-up reveals the Legal procedure of changing directors of Producer Company.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/provisions-for-changing-directors-of-producer-company\/#Pre-Incorporation_Checklist_for_a_Producer_Company\" >Pre-Incorporation Checklist for a Producer Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/provisions-for-changing-directors-of-producer-company\/#Who_can_serve_the_role_of_Directors_of_Producer_Company\" >Who can serve the role of Directors of Producer Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/provisions-for-changing-directors-of-producer-company\/#Duties_of_Board_regarding_the_appointment_and_reappointment_of_Director_in_the_Producer_Company\" >Duties of Board regarding the appointment and\nreappointment of Director in the Producer Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/provisions-for-changing-directors-of-producer-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Pre-Incorporation_Checklist_for_a_Producer_Company\"><\/span>Pre-Incorporation Checklist for a Producer Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Any ten or more producers can\ncollectively form together to establish a production company. There is no cap\non how many members can be part of such a company.<\/li><li>Any two or more producer\ncompanies can join together to form a single producer company.<\/li><li>A minimum capital of Rs 5 lakhs\nis mandatory to incorporate a producer company.<\/li><li>There should be a minimum of\nfive directors &amp; a maximum of 15 in a producer company.<\/li><li>The conversion of Producer\nCompany into a public company isn\u2019t possible law-wise, but it can act as a\nmulti-state cooperative society after being transformed via a legit process.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_can_serve_the_role_of_Directors_of_Producer_Company\"><\/span>Who can serve the role of Directors of Producer Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Every Producer Company shall have a minimum of 5 &amp; not more than\n15 directors; provide that in case of inter-State cooperative society\nfunctioning as a Producer Company, such entity may have more than 15 directors\nfor the duration of one year from the date of its incorporation as Producer\nCompany.<\/p>\n\n\n\n<p><strong><em>Conditions under which the Directorship position might be vacated in\nProducer Company<\/em><\/strong><\/p>\n\n\n\n<ul><li>If the concerned Director has\nbeen a criminal by the Court of Law for any crime involving moral turpitude\n&amp; served a jail term of not less than six months;<\/li><li>If the concerned Director has a\ncriminal track record of repayment of a loan that continues to sustained equal\nor more than ninety days;<\/li><li>If the concerned Director has\nmade repayment error against the loan availed from the Producer Company while\nserving the position of Directorship;<\/li><li>If the concerned Director has\nmade some default in terms of tax liability or dividend, bonus while serving\nthe directorship position in the previous Producer Company;<\/li><li>If the concerned Director has\nfailed to comply with the provisions concerning Annual General Meeting<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Duties_of_Board_regarding_the_appointment_and_reappointment_of_Director_in_the_Producer_Company\"><\/span>Duties of Board regarding the appointment and\nreappointment of Director in the Producer Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Board is liable to appoint a full-time chief executive and vest him\/her with the substantial powers of management.<\/li><li>If any of the directors vacate his\/her position via resignation, the reappointment shall be conducted within 90 days from the resignation date.<\/li><li>The Director is obligated to serve his\/her duties for a timeline not less than one year and a maximum of 5 years as cited in the articles.<\/li><li>Every Director shall stand eligible for reappointment.&nbsp;<\/li><li>The Directors of the company\u2019s board are appointed by the member in the AGM (Annual General Meeting). The board has right to appoint one or more directors not surpassing 1\/5th of the total number of directors. Such directors are liable to hold their position as mentioned in the provisions.<\/li><li>The number of such directors shall not surpass 1\/5th of the total number of directors in a producer company subject to articles of association.<\/li><li>As per the Company Act, these officials are not vested with the right that enables them to cast their vote in the election of the Chairman. However, the said Act allows them to serve the position of Chairmanship.<\/li><\/ul>\n\n\n\n<p><strong><em>Refer the table below that manifests the essential\nprovisions for Producer Company<\/em><\/strong><\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td><\/td><td><\/td><\/tr><tr><td>\n  i.\n  <\/td><td>\n  The members have mandatorily to be&nbsp;primary producers\n  <\/td><\/tr><tr><td>\n  ii.\n  <\/td><td>\n  The company name shall entail the word \u201cProducer Company Limited\n  \u201cat the end. \n  <\/td><\/tr><tr><td>\n  iii.\n  <\/td><td>\n  Such companies rejoice no cap on maximum number of members\n  <\/td><\/tr><tr><td>\n  iv.\n  <\/td><td>\n  On registration, such companies can be converted into a\n  privately-held entity for the purpose of administration of the company &amp;\n  application of law\n  <\/td><\/tr><tr><td>\n  v.\n  <\/td><td>\n  Minimum numbers of 10 members\n  <\/td><\/tr><tr><td>\n  vi.\n  <\/td><td>\n  Share capital of such a company shall comprises of equity shares\n  only\n  <\/td><\/tr><tr><td>\n  vii.\n  <\/td><td>\n  Minimum&nbsp;5&nbsp;&amp; not more than&nbsp;15&nbsp;directors\n  <\/td><\/tr><tr><td>\n  viii.\n  <\/td><td>\n  Producer Company can perform undertakings as prescribed under the\n  Act.\n  <\/td><\/tr><tr><td>\n  ix.\n  <\/td><td>\n  Only of individuals, then right to vote shall be depend on a\n  single vote of every member. \n  <\/td><\/tr><tr><td>\n  x.\n  <\/td><td>\n  Board will appoint the full time chief executive i.e. CEO\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Appointment and Re-appointment of Directors of Producer Company incur plenty of legal implications cited under the Company Act, 2013. <em><strong>Ministry of Corporate Affairs<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Ministry_of_Corporate_Affairs\"><em><strong>[1]<\/strong><\/em><\/a><\/sup> also sets out the requirement of filing a prescribed application on its portal about the completion of formalities regarding directorship. Write to us in case you seek more clarity on the provisions regarding the change of Directors of Producer Company. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/definition-registration-and-types-of-producer-companies-in-india\/\">Definition, Registration, and Types of Producer Companies in India <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The notion of producer Company was introduced in India to enable cooperatives to operate as a corporate establishment under the Ministry of Corporate Affairs. In legal parlance, the producer company refers to a corporate body having an object cited in section 581B &amp; functioning as a Producer Company under the Companies Act, 1956. This write-up [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":37301,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[235],"tags":[2010],"acf":{"service_id":"62"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":5791,"readingTime":3,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/37263"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=37263"}],"version-history":[{"count":35,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/37263\/revisions"}],"predecessor-version":[{"id":37302,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/37263\/revisions\/37302"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/37301"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=37263"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=37263"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=37263"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}