Inter-State Co-operative Societies :

(a) Conversion of Inter-State Co-operative Societies to become producer companies (Section 581J): Any inter-State co-operative society having objects for multiplicity for states may make an application to the Registrar for registration as producer company.

Such application shall be accompanied by—

(a) a copy of the special resolution, of not less than two-third of total members of inter-State co-operative society, for its incorporation as a producer company,

(b) a statement showing—

(i) names and addresses or the occupation of the directors and Chief Executive, if any, by whatever name called, of such co-operative; and

(ii) list of members of such inter-State co-operative society;

(c) a statement indicating that the inter-State co-operative society is engaged in any one or more of the objects specified in section 581B;

(d) a declaration by two or more directors of the inter-State co-operative society certifying that particulars given in clauses (a) to (c) are correct.

The word “Producer Company Limited” should form part of its name to show its identity.

On compliance with the requirements of the Act, the Registrar shall, within a period of thirty days of the receipt of application, certify under his hand that the inter -State co-operative society applying for registration is registered and thereby incorporated as a producer company.

A co-operative society formed by producers, by federation or union of co-operative societies of producers or co-operatives of producers, registered under any law for the time being in force which has extended its objects outside the State, either directly or through a union or federation of co-operatives of which it is a constituent, as the case may be, and any federation or union of such co-operatives, which has so extended any of its objects or activities outside the State, shall be eligible to make an application as above to obtain registration as a producer company under this Part.

The Inter-State Co-operative Society upon its registration, under this section transformed into a producer company, and thereafter shall be governed by the provisions of this Part to the exclusion of the law by which it was earlier governed, save in so far as anything done or omitted to be done before its registration as a producer company, and notwithstanding anything contained in any other law for the time being in force, no person shall have any claim against the co-operative institution or the company by reason of such conversion or transformation.

Upon registration as a producer company, the Registrar of Companies who registers the company is required to intimate the Registrar with whom the erstwhile inter -State co-operative society was earlier registered for appropriate deletion of the society from its register.

(b) Vesting of undertaking in producer company (Section 581L)

(1) All properties and assets, of, or belonging to, the inter-State co-operative society as on the transformation date, shall vest in the producer company.

(2) All the rights, debts, liabilities, interests, privileges and obligations of the inter -State cooperative society as on the transformation date shall stand transferred to, and be the rights, debts, liabilities, interests, privileges and obligations of, the producer company.

(3) Without prejudice to the provisions contained in sub-section (2), all debts, liabilities and obligations incurred, all contracts entered into and all matters and things engaged to be done by, with or for, the society as on the transformation date for or in connection with their purposes, shall be deemed to have been incurred, entered into, or engaged to be done by, with or for, the producer company.

(4) All sums of money due to the inter-State co-operative society immediately before the transformation date, shall be deemed to be due to the producer company.

(5) Every organisation, which was being managed immediately before the transformation date by the inter-State co-operative society shall be managed by the producer company for such part, to such extent and in such manner as the circumstances may require.

(6) Every organisation which was getting financial, managerial or technical assistance from the inter-state co-operative society, immediately before the transformation date, may continue to be given financial, managerial or technical assistance, as the case may be, by the producer company, for such part, to such extent and in such manner as that company may deem fit.

(7) The amount representing the capital of the erstwhile inter -State co-operative society shall form part of the capital of the producer company.

(8) Any reference to the inter-State co-operative society in any law other than this Act or in any contract or other instrument, shall be deemed to be reference to the producer company.

(9) If, on the transformation date, there is pending any suit, arbitration, appeal or other legal proceeding of whatever nature by or against the inter -State co-operative society, the same shall not abate, be discontinued or be in any way prejudicially affected by reason of the incorporation of the producer company under section 581C or transformation of the inter-State co-operative society as a producer company under section 581J, as the case may be, but the suit, arbitration, appeal or other proceeding, may be continued, prosecuted and enforced by or against the producer company in the same manner and to the same extent as it would have, or may have been continued, prosecuted and enforced by or against the inter -State cooperative society as if the provisions contained in this Part had not come into force.

(c) Concession, etc. to be deemed to have been granted to producer company (Section 581M) : With effect from the transformation date, all fiscal and other concessions, licences, benefits, privileges and exemptions granted to the inter -state co-operative society in connection with the affairs and business of the inter-State co-operative society under any law for the time being in force shall be deemed to have been granted to the producer company.

(d) Provisions in respect of officers and other employees of Inter -State Co-operative Society (Section 581N): (1) All the directors in the inter-State co-operative society before the incorporation of the producer company shall continue in office for a part of one year from the transformation date and in accordance with the provisions of this Act.

(2) Every officer or other employee of the inter-State co-operative society (except a director of the Board, Chairman or Managing Director) serving in its employment immediately before the transformation date shall, in so far as such officer or other employee is employed in connection with the inter-State co-operative society which has vested in the producer company by virtue of this Act, become, as from the transformation date, an officer or, as the case may be, other employee of the producer company and shall hold his office or service therein by the same tenure, at the same remuneration, upon the same terms and conditions, with the same obligations and with the same rights and privileges as to leave, leave travel concession, welfare scheme, medical benefit scheme, insurance, provident fund, other funds, retirement, voluntary retirement, gratuity and other benefits as he would have held under the erstwhile inter-State co-operative society if its undertaking had not vested in the producer company and shall continue to do so as an officer or, as the case may be, other employee of the producer company.

(3) Where an officer or other employee of the inter-State co-operative society opts not to be in employment or service of the producer company, such officer or other employee s hall be deemed to have resigned.

(4) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947) or in any other law for the time being in force, the transfer of the services of any officer or other employee of the inter-State co-operative society to the producer company shall not entitle such officer or other employee to any compensation under this Act or under any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority.

(5) The officers and other employees who have retired before the transformation date from the service of the inter-State co-operative society and are entitled to any benefits, rights or privileges, shall be entitled to receive the same benefits, rights or privileges from the producer company.

(6) The trusts of the provident fund or the gratuity fund of the inter -State co-operative society and any other bodies created for the welfare of officers or employees shall continue to discharge functions in the producer company as was being done hitherto in the inter -State cooperative society and any tax exemption granted to the provident fund or the gratuity fund would continue to be applied to the producer company.

(7) Notwithstanding anything contained in this Act or in any other law for the time being in force or in the regulations of the inter-State co-operative society, no director of the Board, Chairman, managing director or any other person entitled to manage the whole or substantial part of the business and affairs of the inter-State co-operative society. The co-operative society shall be entitled to any compensation against the inter -State co-operative society or the producer company for the loss of office or for the premature termination of any contract of management entered into by him with the inter-State co-operative society.