Section 378A Companies Act 2013 - Definitions for Producer Companies

Section 378A is the definition provision in Part I of Chapter XXIA of the Companies Act, 2013. Chapter XXIA deals with Producer Companies. These definitions apply throughout that Chapter unless the context otherwise requires.

Legal position: Chapter XXIA, including section 378A, was inserted by section 52 of the Companies (Amendment) Act, 2020 and came into force on 11 February 2021. The Producer Companies Rules, 2021 also apply to a Producer Company referred to in section 378A(l).

Meaning and scope of Section 378A

The section creates a common vocabulary for the Producer Company provisions. Terms such as active Member, patronage, primary produce, producer, Producer Company and Producer Institution therefore carry the meanings assigned below when Chapter XXIA is applied.

Definitions under Section 378A

  • (a) Active Member: a Member who fulfils the quantum and period of patronage of the Producer Company as may be required by its articles.
  • (b) Chief Executive: an individual appointed as Chief Executive under section 378W(1).
  • (c) Inter-State co-operative society: a multi-State co-operative society as defined in section 3(p) of the Multi-State Co-operative Societies Act, 2002. The definition also covers a co-operative society registered under another law that, after formation, extends its objects to more than one State by participation of persons or extends activities outside its State, directly, indirectly, or through a constituent institution.
  • (d) Limited return: the maximum dividend specified by the articles.
  • (e) Member: a person or Producer Institution, incorporated or unincorporated, admitted as a Member of a Producer Company who continues to possess the required qualifications.
  • (f) Mutual assistance principles: the principles stated in section 378G(2).
  • (g) Officer: includes a director, Chief Executive, Secretary, or a person according to whose directions or instructions part or all of the Producer Company's business is carried on.
  • (h) Patronage: use by Members of services offered by the Producer Company through participation in its business activities.
  • (i) Patronage bonus: payments made from the Producer Company's surplus income to Members in proportion to their respective patronage.
  • (j) Primary produce:
    1. farmers' produce arising from agriculture, including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, re-vegetation, bee raising and farming plantation products, or another primary activity or service promoting the interests of farmers or consumers;
    2. produce of persons engaged in handloom, handicraft and other cottage industries;
    3. products resulting from those activities, including their by-products;
    4. products resulting from an ancillary activity assisting or promoting those activities or anything ancillary to them; or
    5. an activity intended to increase production of the above items or improve their quality.
  • (k) Producer: a person engaged in an activity connected with or relatable to primary produce.
  • (l) Producer Company: a body corporate having objects or activities specified in section 378B and registered as a Producer Company under the Companies Act, 2013 or the Companies Act, 1956.
  • (m) Producer Institution: a Producer Company or another incorporated or unincorporated institution whose members consist only of producer or producers or Producer Company or Producer Companies, which has any object referred to in section 378B and agrees to use the services of the Producer Company or Producer Companies as provided in its articles.
  • (n) Withheld price: the part of the price due and payable for goods supplied by a Member that the Producer Company withholds for payment on a later date.

Why these definitions matter

Section 378A should be read with the substantive provisions that follow it. For example, section 378B identifies the permitted objects of a Producer Company, section 378G deals with its articles and mutual assistance principles, and section 378W concerns appointment and functions of the Chief Executive. The definitions in section 378A help determine who may participate and how benefits, governance and member relationships operate under Chapter XXIA.

Statutory source and commencement

Section 378A forms part of Chapter XXIA of the Companies Act, 2013. The Chapter was inserted by the Companies (Amendment) Act, 2020, with effect from 11 February 2021. For current statutory text and subordinate rules, readers should verify the official sources linked in the sidebar.

This page is a general legal reference. For a transaction, incorporation, compliance filing or dispute, verify the current Act, rules, notifications and applicable facts.