Companies Act Section 378ZC — Special user rights
CHAPTER XXI
Commercial / Corporate
Summary
Sub-section (1) states that producers who are active members of a Producer Company may be given special rights, but only if the company's articles (its internal rules) provide for this. If such rights are given, the Producer Company may issue appropriate instruments (documents or certificates) to those members in respect of those special rights.
Sub-section (2) states that any instruments issued under sub-section (1) can be transferred to any other active member of the same Producer Company, but only after obtaining the approval of the Board for that transfer.
The Explanation clarifies that, for this section, the expression "special right" means any right relating to the supply of additional produce by the active member, or any other right relating to that member's produce, which the Board may confer on that member.
Official Text
(1) 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.
(2) 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.