The Companies (Amendment) Act, 2002 has introduced provisions relating to Producer Companies vide Sections 581A to 581ZT under Part-IXA of the Companies Act, 1956.
Section 465-of the Companies Act, 2013, deals with the provisions relating to repeal of certain enactments and savings.
However, Section 465 (1) of the Companies Act, 2013 has retained the provisions relating to Producer Companies and clarifies that these provisions shall continue to be in force in a manner as if the Companies Act, 1956 has not been repealed until a special Act is enacted for Producer Companies.
In view of the explicit provisions contained in the Companies Act, 2013, the Producer Companies are continued to be governed by the Companies Act, 1956 (Section 581A to 581ZT) for the time bring.
Thus, under this topic ‘Producer Companies’, wherever the word ‘Act’ is used, it refers to the Companies Act, 1956.
It must be understood that the concept of Producer companies has not-taken off despite there being enough potential in view of some of the irritants like restricted tenure of directors of maximum five years.
People who have for long been associated with co-operative and other such movements in’ India nave found that the tenure of five years is too short and would force people out of the producer companies.
The tenure should be suitably enhanced.
The Government has done well to retain the old provisions of Companies Act, 1956, but should give a try to remove the irritants so that the movement tokes off.