Producer company Share Allotment

Becoming a member of a Producer Company is a specific process governed by the Companies Act. Here is the guidance regarding your questions:

1. How to become a member in a Producer Company

Membership is restricted to "producers"—individuals or institutions (such as cooperative societies or other Producer Companies) engaged in activities related to primary produce (e.g., agriculture, animal husbandry, horticulture, etc.).

• Eligibility: You must qualify as a "producer" as defined under the Act, meaning you are actively engaged in producing or handling primary produce.

• Application: Generally, a person applies to the Board of Directors of the company. The Board reviews the application to ensure the applicant meets the eligibility criteria and, if approved, admits them as a member.

• Articles of Association: The specific procedure for admission, including any application forms or fees, is usually detailed in the company's Articles of Association (AOA).

2. Can a person become a member by way of allotment of shares?

Yes. In a Producer Company, membership is inextricably linked to shareholding.

• Allotment: A person can become a member by subscribing to or being allotted shares in the company.

• Share Application: You can apply for shares in the company. However, unlike a typical public company, the primary purpose of shareholding here is to facilitate membership for producers. The company may also allot shares to members in lieu of "withheld prices" for produce supplied to the company.

• Minimums: While you asked about applying for 1 share of Rs. 10, the company’s AOA will dictate the minimum shareholding requirements for becoming an active member.

3. What is the process for the allotment of shares?

The process for allotting shares generally involves the following steps:

1. Application: The interested person submits an application for membership and shares to the Board of Directors.

2. Board Approval: The Board of Directors meets to review the application and approves the allotment of shares to the eligible producer.

3. Entry in Register: Once approved, the company issues the shares and updates its Register of Members.

4. Compliance: The company must comply with the procedural requirements of the Companies Act, including the filing of any necessary returns (such as PAS-3, if applicable) with the Registrar of Companies (ROC).

Summary:

To become a member of a Producer Company, you must be a "producer" (e.g., a farmer). You can join by applying to the Board of Directors, which, upon approval, will allot shares to you. Your membership is finalized once the shares are allotted and your name is entered into the company's Register of Members. The specific application process and rules are defined in the company's Articles of Association.