Section 378ZC Special user rights – Companies Act 2013

Section 378ZC of Companies Act 2013 amended by Companies (Amendment) Act 2020. Discussion on provisions and rules for Special user rights.

Amended and updated notes on section 378ZC 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 Special user rights.

Chapter XXIA PART-V (Section 378ZB to 378ZD) of the Companies Act 2013 (CA 2013) deals with the provisions related to share capital and members rights. Section 378ZC of CA 2013 provides for Special user rights.

Recently, we have discussed in detail section 378ZB (Share capital) of CA 2013. Today, we learn the provisions of section 378ZC 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 378ZC 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 378ZC 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-V)
Chapter NameShare Capital and Members Rights
Section No.378ZC
Section NameSpecial user rights
Monthly Updated EditionCompany Law PDF

Section 378ZC: Special user rights

Section 378ZC(1) of Companies Act

The producers, who are active Members may, if so provided in the articles, have special rights and the Producer Company may issue appropriate instruments to them in respect of such special rights.

Section 378ZC(2) of Companies Act

The instruments of the Producer Company issued under sub-section (1) shall, after obtaining approval of the Board in that behalf, be transferable to any other active Member of that Producer Company.

Explanation: For the purposes of this section, the expression “special right” means any right relating to supply of additional produce by the active Member or any other right relating to his produce which may be conferred upon him by the Board.


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