Register a Producer Company

As per section clause (1) of section 581C of the companies Act, 1956, anybody of the next combination can form a Producer Company:
• Any ten or more individuals each of them being a producer
• Or any two or more Producer Institutions
• Or Combination of 10 or more individuals and Producer Institutions

The tax Act, 1961, (“the IT Act”) specifically exempts tax on agricultural income under Section 10(1). However, the exemption for such agricultural income shall sometimes vary depending upon the type of agricultural activity carried on.
It is to be noted that though the IT Act doesn't per-se give any special benefits or exemptions to Producer Companies intrinsically, but depending upon the type of agricultural activity it carries on, certain tax benefits are often availed.
Dividend tax at the applicable rates is required to be paid by the corporate at the time of patronage bonus, limited return distribution and therefore the same is going to be tax-free in the hands of the members.
Bonus shares won't attract any tax within the hands of the members at the time of allotment, however at the time of sale or redemption necessary provision of capital gain tax shall apply.

As per section 581V of the businesses Act, 1956, meetings of the Board shall be held not but once every three months and a minimum of four such meetings shall be held every year.
The above provisions need clarification and wish to be aligned with Section 173 of Companies Act, 2013 and Secretarial Standard I, as per Secretarial Standard I read with Companies Act, 2013, every company shall hold 4 Board meetings during a civil year and gap between 2 Board Meetings shall not be quite 120 days, just in case of 1 person company and small company are required to hold one Board Meeting in each of calendar year and the gap between 2 Board Meetings shall not be less than 90 days.

As per section 581ZA of the companies Act, 1956, every Producer Company shall in annually, hold, additionally to the opposite meetings, a general meeting, as its annual general meeting and shall specify the meeting intrinsically within the notices calling it, and less than fifteen months shall elapse between the date of 1 annual general meeting of a Producer Company which of subsequent.
The Registrar may, for any special reason, permit extension of the time for holding an annual general meeting (not being the first annual general meeting) by a period not exceeding three months.
A Producer Company shall hold its first annual general meeting within a period of ninety days from the date of its incorporation.
Above clause 2 of Section, 581ZA states that the first Annual General Meeting shall be held within a period of 90 days from the date of its incorporation which is different from the existing Companies Act 2013. As per section 96 of the Companies Act, 2013, the first Annual General Meeting shall be held within 9 months of the close of the first financial year.

A Member of a Producer Company may, after obtaining the previous approval of the Board, transfer the entire or a part of his shares alongside any special rights, to an active Member at par.
Here “active members” means a member who fulfills the quantum and period of patronage of the Producer Company as could also be required by the articles.
In the above provision there's one practical difficulty as if there are only 10 members as needed by the Act and if one among them wants to transfer his shares and as the above provision suggests that the shares can be transferred only to an active member, whether an outsider incoming member can be termed as an active member is the question and if he transfers his shares to existing members then the minimum requirement of members will fall below which is again a default.
Probable resolution – the provision of obtaining the previous approval of the Board for transfer of shares shall be kept as it is only the word transfer to active members shall be interchanged with Producer.