With reference to the following queries of Sangita, Chief Executive Officer of South Village Fresh Farmers Producer Company Ltd., how would you deal with them as per the Companies Act, 2013? (i) There has arisen a disput

CS Executive · Company Law · PYQS · December 2020
With reference to the following queries of Sangita, Chief Executive Officer of South Village Fresh Farmers Producer Company Ltd., how would you deal with them as per the Companies Act, 2013? (i) There has arisen a dispute relating to management of the entity. (ii) The entity wants to amend its Articles relating to quorum for general meeting which would stipulate that three fourth of total members shall be the required quorum for its general meeting.

Answer & Explanation:

First Proviso to Section 465(1) of the Companies Act, 2013, provides that the provisions of Part IX A of the erstwhile Companies Act, 1956 shall be applicable mutatis mutandis to the Producer Companies in a manner as if the Companies Act, 1956 has not been repealed until a Special Act is enacted for Producer Companies. Dispute relating to management of the entity: Section 581ZO of the erstwhile Companies Act 1956, provides that any dispute relating to the formation, management or business of a Producer Company shall be settled by conciliation or arbitration as provided under the Arbitration and Conciliation Act, 1996. Amendment to Articles relating to quorum for general meeting: Section 581Y of the erstwhile Companies Act 1956, provides that unless articles of association provide for a larger number, one-fourth of total membership shall constitute quorum at a general meeting. If the Article provide for a larger number, it is a valid provision. Hence, the provision in articles requiring the quorum for general meeting to be three-fourth of total members is valid. Thus, Sangita Chief Executive of South Village Fresh Farmers Producer Company Ltd. should be informed accordingly.

Topics: Producer Companies

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