Articles of Association (Section 581G) :
The articles should contain the following provisions, namely:
(a) the qualifications for member, the conditions for continuance or cancellation of member and the terms, conditions and procedure for transfer of shares;
(b) the manner of ascertaining the patronage and voting right based on patronage;
(c) subject to the provisions contained in sub-section (1) of section 581N, the manner of constitution of the Board, its powers and duties, the minimum and maximum number of directors, manner of election and appointment of directors and retirement by rotation, qualifications for being elected or continuance as such and the terms of office of the said directors, their powers and duties, conditions for election or co-option of directors, method of removal of directors and the filling up of vacancies on the Board, and the manner and the terms of appointment of the Chief Executive;
(d) the election of the Chairman, term of office of directors and the Chairman, manner of voting at the general or special meetings of members, procedure for voting, by directors at meetings of the Board, powers of the Chairman and the circumstances under which the Chairman may exercise a casting vote.
(e) the circumstances under which, and the manner in which, the withheld price is to be determined and distributed;
(f) the manner of disbursement of patronage bonus in cash or by issue of equity shares, or both;
(g) the contribution to be shared and related matters referred to in sub-section (2) of section 581ZI;
(h) the matters relating to issue of bonus shares out of general reserves as set out in section 581ZJ;
(i) the basis and manner of allotment of equity shares of the producer company in lieu of the whole or part of the sale proceeds of produce or products supplied by the member s;
(j) the amount of reserves, sources from which funds may be raised, limitation on raising of funds, restriction on the use of such funds and the extent of debt that may be contracted and the conditions thereof;
(k) the credit, loans or advances which may be granted to a member and the conditions for the grant of the same;
(l) the right of any member to obtain information relating to general business of the company;
(m) the basis and manner of distribution and disposal of funds available after meeting liabilities in the event of dissolution or liquidation of the producer company;
(n) the authorisation for division, amalgamation, merger, creation of subsidiaries and the entering into joint ventures and other matters connected therewith;
(o) laying of the memorandum and articles of the producer company before a special general meeting to be held within ninety days of its registration;
(p) any other provision, which the member may, by special resolution recommend to be included in articles.
The articles should also contain the following mutual assistance principles, namely:
(a) the membership shall be voluntary and available, to all eligible persons who, can participate or avail of the facilities or services of the producer company, and are willing to accept the duties of member;
(b) each member shall save as otherwise provided in this Part, have only a single vote irrespective of the share holding;
(c) the producer company shall be administered by a Board consisting of persons elected or appointed as directors in the manner consistent with the provisions of this Part and the Board shall be accountable to the members;
(d) save as provided in this Part, there shall be limited return on share capital;
(e) the surplus arising out of the operations of the producer company shall be distributed in an equitable manner by—
(i) providing for the development of the business of the producer company;
(ii) providing for common facilities; and
(iii) distributing amongst the members, as may be admissible in proportion to their respective participation in the business;
(f) provision shall be made for the education of member, employees and others, on the principles of mutuality and techniques of mutual assistance;
(g) the producer company shall actively co-operate with other producer companies (and other organisations following similar principles) at local, national or international level so as to best serve the interest of their members and the communities it purports to serve.
(a) Amendment of memorandum (Section 581H): A producer company shall not alter the conditions contained in its memorandum except in the cases, by the mode and to the extent for which express provision is made in this Act. However, a producer company may, by special resolution, not inconsistent with section 581B, alter its objects specified in its memorandum.
A copy of the amended memorandum, together with a copy of the special resolution duly certified by two directors, shall be filed with the Registrar within thirty days from the date of adoption of resolution.
In case of transfer of the registered office of a producer company from the jurisdiction of one Registrar to another, certified copies of the special resolution certified by two directors shall be filed with both the Registrars within thirty days, and each Registrar shall record the same, and thereupon the Registrar from whose jurisdiction the office is transferred, shall forthwith forward to the other Registrar all documents relating to the producer company.
The alteration of the provisions of memorandum relating to the change of the place of its registered office from one State to another shall not take effect unless it is confirmed by the Company Law Board on petition.
(b) Amendment of articles (Section 581-I): Any amendment of the articles should be proposed by not less than two-third of the elected directors or by not less than one-third of the members of the producer company, and adopted by the members by a special resolution.
A copy of the amended articles together with the copy of the special resolution, both duly certified by two directors, should be filed with the Registrar within thirty days from the date of its adoption.