CS Executive · Setting Up of Business, Industrial and Labour Laws · Selection of Business Organization
A group of farmers in Maharashtra wants an entity that is a company, owned by primary producers, and that can be formed by transformation of an inter-State co-operative society. Per the Companies Act, 2013, which statement is correct about such transformation?
On transformation of an inter-State co-operative society into a Producer Company, its assets vest in the company, its rights and liabilities transfer to it, its capital forms part of the company's capital, and pending legal proceedings do not abate but continue by or against the company.
- AThe society's assets vest in the Producer Company, and pending legal proceedings do not abateCorrect
- BThe society's debts remain with the society and do not pass to the company
- CPending suits by or against the society are discontinued on transformation
- DThe society's capital is extinguished and does not form part of the company's capital
Explanation
On transformation, all properties and assets vest in the Producer Company, and rights, debts and liabilities stand transferred to it. Pending suits, arbitrations and appeals do not abate and may be continued by or against the company. The society's capital forms part of the company's capital, so the other options are wrong.
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