Producer companies
Querist :
Anonymous
(Querist) 05 December 2011
This query is : Resolved
Can Government with 51% contribution form a producer company with management by the private sector and yet avoid being a Government Company.
Sailesh Kumar Shah
(Expert) 05 December 2011
your is not much clear,However, general rule is:-
holding 51% share in the company by the government, is called government company.
prabhakar singh
(Expert) 05 December 2011
please re frame your question to make it a bit more intelligible ????
Guest
(Expert) 05 December 2011
How do you feel that a Government company cannot be a producer company? It seems you want some specific information, but you have not been able to express what informtion and for what purpose you want the answer. A company is recognised as a public company or private company, not from the btype of business it undertakes.
A Government company cannot always be and merely be a service company. Irrespective of the activity or business of a company, if the stake of Government in any company is 51% its status of a Government or public company cannot be overruled.
Nadeem Qureshi
(Expert) 05 December 2011
Mr. Dhingra is rightly explain
Querist :
Anonymous
(Querist) 05 December 2011
Thank you for your replies and I'm sorry if my query was not clear. The facts of the case is as follows:
1. I am looking at the formation of a producer company for the benefit of farmers.
2. The Govt wants to start up the company by putting in 51% share capital.
3. However we want that the management of the company remain in the hands of the producers and not Govt.
4. Is there any way that the Govt. can put in its 51% share but at the same time the company can still retain its identity as a Producer Company with management in the hands of the producers.
5. Can the Govt contribution be treated as a corpus for the new company?
I hope that what I have outlined is clear and I thank you all for you kind and prompt response.
Sailesh Kumar Shah
(Expert) 05 December 2011
Answer will remain same as earlier said that holding 51% share in the company by the government, is called government company.
Sailesh Kumar Shah
(Expert) 05 December 2011
Extract of Section 617:-
617. Definition of "Government Company"
For the purposes of this Act Government company, means any company in which not less than fifty one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary of a Government company as thus defined.
Guest
(Expert) 05 December 2011
If you want management of farmers, why don't you opt for a farmers cooperative society where the entire control would remain with the farmers body only.
Moreover, it is not understood, under which circumstances, ground and provision of law the Government is compelling you to compulsorily accept Government's participation up to 51% in a producer company under the company law?
Querist :
Anonymous
(Querist) 07 December 2011
Thank you Sirs for your expert guidance. However to reply to Shri. P. S. Dhingra, a cooperative Society gives too much scope for interference by the RCs and ARCs.
Furthermore the Govt is not compelling us to accept its participation. It is offering upto 51% grant for starting the PC.
Our question is: Can the Govt act as a promoter and its grant contribution be treated as a corpus for the PC.
Will acceptance of the grant mean that Govt will own 51% of the PC?
Guest
(Expert) 07 December 2011
Government's grant and participation in shareholding are two quite distinct issues. The question arises, whether the Government is giving grant to the company/society or desires participation in share holding of 51%? So, you need to be clear first on this point.
Querist :
Anonymous
(Querist) 08 December 2011
Thank you Sir. To clarify, the Govt is offering a grant to the company.
