Section 378ZI: General and other reserves
This section is for maintaining general and other reserves in a Producer Company.
The section, clause by clause
What the section says
In plain terms
(1)Every Producer Company shall maintain a general reserve in every financial year, in addition to any reserve maintained by it as may be specified in articles.
Every Producer Company must maintain a general reserve each financial year, in addition to any other reserve specified in its articles.
(2)In a case where the Producer Company does not have sufficient funds in any financial year for transfer to maintain the reserves as may be specified in articles, the contribution to the reserve shall be shared amongst the Members in proportion to their patronage in the business of that Company in that year.
If a Producer Company does not have enough funds in a financial year to maintain the reserves specified in its articles, the members will share the contribution to the reserve in proportion to their patronage in the company's business that year.
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.