Section 378P: Appointment of directors
This section is for outlining the rules and procedures for appointing and electing directors of a Producer Company.
The section, clause by clause
What the section says
In plain terms
(1)Save as otherwise provided in section 378N, the Members who sign the memorandum and the articles may designate therein the Board of Directors, not less than five, who shall govern the affairs of the Producer Company until the directors are elected in accordance with the provisions of this section.
The members who sign the memorandum and articles can designate at least five directors to govern the company until new directors are elected according to this section.
(2)The election of directors shall be conducted within a period of ninety days of the registration of the Producer Company:
The election of directors must be held within 90 days of the company's registration, unless it's an inter-State co-operative society, in which case it can be held within 365 days.
provisoProvided that in the case of an inter-State co-operative society which has been registered as a Producer Company under sub-section (4) of section 378J in which at least five directors [including the directors continuing in office under sub-section (1) of section 378N] hold office as such on the date of registration of such company, the provisions of this sub-section shall have effect as if for the words "ninety days", the words "three hundred and sixty-five days" had been substituted.
(3)Every person shall hold office of a director for a period not less than one year but not exceeding five years as may be specified in the articles.
Each director holds office for a term of at least one year but no more than five years, as specified in the articles.
(4)Every director, who retires in accordance with the articles, shall be eligible for re-appointment as a director.
A director who retires can be re-appointed as a director.
(5)Save as otherwise provided in sub-section (2), the directors of the Board shall be elected or appointed by the Members in the annual general meeting.
Directors are elected or appointed by members at the annual general meeting, except as provided in sub-section (2).
(6)The Board may co-opt one or more expert directors or an additional director not exceeding one- fifth of the total number of directors or appoint any other person as additional director for such period as the Board may deem fit:
The Board can co-opt up to one-fifth of the total number of directors as expert or additional directors for a period it deems fit.
provisoProvided that the expert directors shall not have the right to vote in the election of the Chairman but shall be eligible to be elected as Chairman, if so provided by its articles:
provisoProvided further that the maximum period, for which the expert director or the additional director holds office, shall not exceed such period as may be specified in the articles.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.