Companies Act Section 378ZB — Share capital

CHAPTER XXI

Commercial / Corporate

Summary

Sub-section (1) states that the share capital of a Producer Company is made up only of equity shares. This means the company cannot issue any other type of shares, such as preference shares.

Sub-section (2) says that the shares held by a member in a Producer Company should, as far as possible, be in proportion to the patronage of that company. In other words, the number of shares a member holds is meant to reflect how much business or value they bring to the company.

Official Text

(1) The share capital of a Producer Company shall consist of equity shares only.

(2) The shares held by a Member in a Producer Company, shall as far as may be, be in proportion to the patronage of that company.