Section 378D Membership and voting rights of Members of Producer Company – Companies Act 2013

Section 378D of Companies Act 2013 amended by Companies Amendment Act, 2020. Membership and voting rights of Members of Producer Company.

Amended and updated notes on section 378D of the Companies Act 2013 as amended by the Companies (Amendment) Act, 2020 and Company Rules made there under. Detail discussion on provisions and rules related to Membership and voting rights of Members of Producer Company.

Chapter XXIA PART-II (Sections 378B to 378N) of the Companies Act 2013 (CA 2013) deals with the provisions related to incorporation of producer companies and other matters. Section 378D of CA 2013 provides for Membership and voting rights of Members of Producer Company.

Recently, we have discussed in detail section 378C (Formation of Producer Company and its registration) of CA 2013. Today, we learn the provisions of section 378D of the Companies Act 2013.

In exercise of the powers conferred by sub-section (2) of section 1 of the Companies (Amendment) Act, 2020 (29 of 2020), the Central Government appoints the 11th February, 2021 as the date on which the provisions of section 52 of the Companies (Amendment) Act, 2020 shall come into force.

Accordingly, the provisions of section 378D are effective from 11th February, 2021. You may refer Notification No. S.O. 644(E) dated 11-02-2021. In this article, you will learn detail of the provisions of section 378D the Companies Act 2013.

Name of ActThe Companies Act 2013
Enacted byParliament of India
Administered byMinistry of Corporate Affairs (MCA)
Number of Chapters29
Number of Sections484 (470-43+57)
Number of Schedules7
You are reading:
Chapter No.XXIA (PART-II)
Chapter NameIncorporation of Producer Companies and other matters
Section No.378B
Section NameMembership and voting rights of Members of Producer Company
Monthly Updated EditionCompany Law PDF

Section 378D: Membership and voting rights of Members of Producer Company

Section 378D(1) of Companies Act

(a) In a case where the membership consists solely of individual Members, the voting rights shall be based on a single vote for every Member, irrespective of his shareholding or patronage of the Producer Company.
(b) In a case where the membership consists of Producer Institutions only, the voting rights of such Producer Institutions shall be determined on the basis of their participation in the business of the Producer Company in the previous year, as may be specified by articles:

Provided that during the first year of registration of a Producer Company, the voting rights shall be determined on the basis of the shareholding by such Producer Institutions.
(c) In a case where the membership consists of individuals and Producer Institutions, the voting rights shall be computed on the basis of a single vote for every Member.

Section 378D(2) of Companies Act

The articles of any Producer Company may provide for the conditions, subject to which a Member may continue to retain his membership, and the manner in which voting rights shall be exercised by the Members.

Section 378D(3) of Companies Act

Notwithstanding anything contained in sub-section (1) or sub-section (2), any Producer Company may, if so authorised by its articles, restrict the voting rights to active Members, in any special or general meeting.

Section 378D(4) of Companies Act

No person, who has any business interest which is in conflict with business of the Producer Company, shall become a Member of that Company.

Section 378D(5) of Companies Act

A Member, who acquires any business interest which is in conflict with the business of the Producer Company, shall cease to be a Member of that Company and be removed as a Member in accordance with the articles.

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