Membership is open to all. However a member of a producer company shall necessarily be a primary producer, that is a person engaged in an activity connected with, or relatable to primary produce. Members should participate and avail of the facilities or services of the society and should accept his duties. Spirit of mutual co-operation and assistance is the basis for membership of a producer company.
No person who has any business interest which is in conflict with the producer company shall become a member of that company. A member who acquires any such business interest shall cease to be a member of that company and be removed as a member in accordance with the articles.
Share capital consists of equity shares only. Shares of a member shall be in proportion to the patronage of that company. The liability of its members shall be limited by the memorandum to the amount if any, unpaid on the shares respectively held by each member. The voting rights of a member shall be based on a single vote for every member, irrespective of his share holding. In case of equality of votes the Chairman or the person presiding shall have a casting vote. The voting rights of a producer institution shall be determined on the basis of its participation in the business of the producer company in the previous year, as may be specified in the articles However, during the first year of registration of a producer company, the voting rights shall be determined the basis of the shareholding of such producer institution.
Where the membership consist of individuals a producer institutions the voting rights shall be compute on the basis of a single vote for every member. Any Producer Company, if authorized by its articles may provide for special rights to active members in any special or general meeting.
Membership equity may be transferred with the previous approval of the Board of Directors but only to active member at par value, In case of death, shares will be transferred to his nominee provided he is a producer, failing which the nominee will have to surrender the shares at value determined by the board.
Every member shall initially receive only such value for the produce or products pooled and supplied as the Board may determine. The withheld price which is part of the price due ad payable may be disbursed later in kind or by allotment of equity shares in proportion to the produce supplied to the producer company during the financial year as may be decided by the Board.
Every member shall on the share capital contributed receive only a limited return. Every such member may be allotted bonus shares upon recommendation of the Board and passing of resolution in general meeting by capitalization of amounts from general reserves in proportion to the shares held by the member. The surplus, if any, after providing for payment of limited returns and reserves may be distributed as patronage bonus amongst the members in proportion to their participations in the business of the producer company, either in cash or by way of allotment of equity shares, or both as may be decided byte members at the general meeting.
Governance of Producer companies
The Memorandum and Articles of Association of every producer company shall provide for the matters set out in Secs 581 F and 581 G Mutual assistance principles are set out in sec 581 which shall also be provided in the articles:
The producer company shall be managed by the Board of Directors, Following powers shall, however be exercised by means of resolution passed at annual general meetings of its members:
1) Approval of budget and adoption of annual accounts of the producer company.
2) Approval of patronage bonus;
3) Issue of bonus shares;
4) Declaration of limited return and decision on the distribution of patronage;
5) Specify the conditions and limits of loans that may be given by the Board to any director and
6) Approval of any transaction of the nature as is to be reserved in the articles for approval by the members.