Section 378ZR of Companies Act 2013 - Application of Private Company Provisions to Producer Companies
Section 378ZR forms part of the special statutory framework for Producer Companies under the Companies Act, 2013. It explains when provisions that ordinarily apply to a private company also apply to a Producer Company.
What Section 378ZR provides
Section 378ZR provides, in substance, that the limitations, restrictions and provisions of the Companies Act, 2013 applicable to a private company also apply, as far as may be, to a Producer Company as though it were a private limited company, except where those provisions conflict with the special provisions governing Producer Companies in the relevant Chapter.
The section therefore uses the private-company framework as a supplementary legal framework for a Producer Company. The special Producer Company provisions remain controlling where there is an inconsistency.
Meaning and legal effect
The expression "as far as may be" indicates that private-company provisions are not imported mechanically. They apply to a Producer Company only to the extent that their application is workable and is not inconsistent with the special statutory scheme for Producer Companies.
In practical terms, Section 378ZR should be read together with Section 378ZQ, which gives overriding effect to the special Producer Company provisions where an inconsistency arises.
What is a Producer Company?
A Producer Company is a body corporate incorporated under the Companies Act framework for Producer Companies. Its objects and membership structure are governed by the special provisions of the Act, including provisions dealing with primary produce, production, harvesting, procurement, grading, pooling, handling, marketing, selling, export and related activities.
How Section 378ZR operates
When a compliance or governance question concerning a Producer Company is not specifically dealt with by the Producer Company provisions, the corresponding provisions applicable to a private company may apply. If a general private-company rule conflicts with a specific Producer Company rule, the specific Producer Company provision prevails to the extent of that conflict.
Relationship with nearby provisions
Section 378ZP deals with striking off the name of a Producer Company. Section 378ZQ addresses the overriding effect of the Producer Company chapter. Section 378ZR then supplies the private-company provisions, so far as applicable and consistent. Section 378ZS deals with re-conversion of an eligible Producer Company into an inter-State co-operative society.
Legislative history
Section 378ZR was inserted into the Companies Act, 2013 by section 52 of the Companies (Amendment) Act, 2020 (Act 29 of 2020), with effect from 11 February 2021.
Official text and verification
For the authoritative statutory text and subsequent amendments, readers should verify the current Companies Act, 2013 through the India Code portal and the Ministry of Corporate Affairs.