CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Stakeholders Rights
Gramin Millets Producer Company Ltd has only individual farmers as members. One farmer holds more shares and supplies far more produce than the others. How are voting rights determined under the Companies Act, 2013 provisions for Producer Companies?
Each member has a single vote. Section 378D(1)(a) says that where membership consists solely of individual members, voting rights are one vote per member, irrespective of shareholding or patronage of the Producer Company, so the larger farmer gets no extra votes.
- AIn proportion to shareholding
- BIn proportion to the produce patronage of each member
- COne vote per member irrespective of shareholding or patronageCorrect
- DWeighted by the previous year's participation in business
Explanation
Section 378D(1)(a) provides that where membership consists solely of individual members, voting is one vote per member irrespective of shareholding or patronage. Participation-based voting applies only where members are solely Producer Institutions.
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