Section 378G — Articles of association

(1) There shall be presented, for registrati on to the Registrar of the
State to which the registered office of the Producer Company is, stated by the memorandum of association,
to be situate—
(a) memorandum of the Producer Company;
(b) its articles duly signed by the subscribers to the memorandum.
(2) The articles shall 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 wil ling to accept the duties of
membership;
(b) each Member shall, save as otherwise provided in this Chapter, have only a single vote
irrespective of the shareholding;
(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 Chapter and the Board shall
be accountable to the Members;
(d) particulars on limited return on share capital;
(e) the surplus arising out of the operations of the Producer Compan y 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 for the education of Members, 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.
(3) Without prejudice to the generality of the foregoing provisions of sub-sections (1) and ( 2), the
articles shall contain the following provisions, namely:—
(a) the qualifications for membership, the conditions for continuance or cancellation of membership
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 378N, 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 378ZI;
(h) the matters relating to issue of bonus shares out of general reserves as set out in section 378ZJ;
(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 Members;
(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 Members may, by special resolution recommend to be included