Sections 378ZQ to 378ZU explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The last five sections of Chapter XXIA tie the Chapter to the rest of the law. Section 378ZQ gives the Chapter priority. Section 378ZR applies the private company rules of the Act to a Producer Company where the Chapter is silent. Section 378ZS allows an erstwhile inter-State co-operative society to re-convert. Sections 378ZT and 378ZU give the Central Government power to adapt the Act and make rules.
Chapter XXIA overrides anything inconsistent in the Act or any other law, but other laws still apply where the Chapter does not vary them (s.378ZQ). All limitations, restrictions and provisions of the Act that apply to a private company apply to a Producer Company as far as may be, so long as they do not conflict with the Chapter (s.378ZR). A Producer Company that was an erstwhile inter-State co-operative society may apply to the Tribunal to re-convert (s.378ZS). The Central Government may modify the Act's application by notification laid in draft before Parliament (s.378ZT) and make rules (s.378ZU). The Bill 2026 proposes a change to section 378ZS(6) only; it is pending.
The sections at a glance
| Section | Subject | Key rule |
|---|---|---|
| 378ZQ | Overriding effect | Chapter prevails over inconsistent provisions of the Act or any other law; other laws apply if not varied or inconsistent |
| 378ZR | Private company provisions | Apply as far as may be, if not in conflict with the Chapter |
| 378ZS | Re-conversion | For an erstwhile inter-State co-operative society; through the Tribunal |
| 378ZT | Power to modify the Act | Central Government notification, laid in draft before Parliament for thirty days |
| 378ZU | Rules | Central Government may make rules for the purposes of the Chapter |
Overriding effect: section 378ZQ
The Chapter has effect "notwithstanding anything inconsistent therewith contained in this Act or any other law for the time being in force or any instrument having effect by virtue of any such law". The section then saves the other laws: provisions of any such Act, law or instrument, in so far as the Chapter does not vary them and they are not inconsistent with it, apply to the Producer Company. So, for example, where the Chapter prescribes a quorum or a notice period, that prevails over the general rule; where it says nothing, the general law applies. The same idea appears in the quorum and voting rules in sections 378Y to 378ZA.
Private company provisions: section 378ZR
Section 378ZR says that "all the limitations, restrictions and provisions of this Act, other than those specified in this Chapter, applicable to a private company" apply, as far as may be, to a Producer Company, as if it were a private limited company, in so far as they are not in conflict with the Chapter.
This follows from section 378C(5), which treats the company as a private limited company without a limit on Members, and which says it can never become a public company; see section 378C on formation. The effect is that a Producer Company cannot rely on its special status to skip general compliances. For drafting, filings and board papers that the Chapter does not cover, it should follow the private-company position. If you are unsure which rule governs, a short legal consultation can settle the point, and our Producer Company registration service covers the set-up side. See also our Producer Company compliance requirements checklist.
Re-conversion to a co-operative society: section 378ZS
Who and how
Section 378ZS(1) applies to a Producer Company that is an erstwhile inter-State co-operative society, formed and registered under the Chapter. It may apply to the Tribunal for re-conversion to the inter-State co-operative society, either:
- (a) after passing a resolution in general meeting by not less than two-thirds of Members present and voting; or
- (b) on request of its creditors representing three-fourths in value of its total creditors.
The Tribunal's role
| Step | Sub-section | What happens |
|---|---|---|
| Meeting | (2) | Tribunal directs a meeting of Members or creditors, conducted as it directs |
| Approval | (3) | If a majority in number representing three-fourths in value of the creditors or Members present and voting agrees, and the Tribunal sanctions, it binds all Members, creditors and the company |
| Disclosure | (3), proviso | No sanction unless the applicant has disclosed all material facts, such as latest financial position, latest auditor's report and any pending Chapter XIV investigation |
| Filing | (4) | The order has no effect until a certified copy is filed with the Registrar |
| Copies | (5) | A copy of the order is annexed to every copy of the memorandum issued after filing |
| Default | (6) | Company and every defaulting officer punishable with fine up to Rs 100 for each copy in default |
| Stay | (7) | Tribunal may stay suits or proceedings against the company until the application is decided |
| After sanction | (8) | Apply under the Multi-State Co-operative Societies Act, 2002 or any other applicable law within six months of sanction, and report to the Tribunal, the Registrar of Companies and the Registrar of Co-operative Societies |
For the forward route from a co-operative society, see sections 378J to 378N.
Power to modify the Act: section 378ZT
Under 378ZT(1), the Central Government may, by notification, direct that any provision of the Act (other than those in the Chapter) shall not apply to Producer Companies or a class of them, or shall apply with specified exceptions or adaptations. Under 378ZT(2), a draft of the notification is laid before each House of Parliament for a total of thirty days. If both Houses agree in disapproving it or in modifying it before the expiry of the session immediately following, it is not issued, or is issued only in the modified form. Check for current notifications before assuming any general provision applies to a Producer Company without change.
Rules: section 378ZU
Section 378ZU says the Central Government may make rules for carrying out the purposes of the Chapter. Where earlier sections say "as may be prescribed", such as the mode of investing reserves in section 378ZL(1), the rules fill the gap.
Example. A Producer Company wants to appoint a company secretary or hold a board meeting in a way the Chapter does not spell out. Under section 378ZR, the company looks to the private company provisions of the Act, as far as they do not conflict with the Chapter, and checks any notification under section 378ZT that adapts them.
Proposed change (Corporate Laws (Amendment) Bill, 2026)
The Bill is pending and is not law. Clause 89 would substitute sub-section (6) of section 378ZS. Under the proposed text, if default is made in complying with sub-section (4), the company and every officer in default would be liable to a penalty of one hundred rupees for each copy in respect of which default is made, in place of the present fine. The Bill carries separate clauses on other Chapter XXIA sections, but our search found no clause amending sections 378ZQ, 378ZR, 378ZT or 378ZU.
Need help with Producer Company law questions?
Chapter XXIA sits alongside the rest of the Act, and knowing which rule governs a point is half the work. Our team can help through our Producer Company registration service, from setting up the company to working out which compliances apply.
Key takeaways
- Chapter XXIA overrides inconsistent provisions, but other laws apply where it does not vary them.
- Private company rules apply as far as may be, where not in conflict with the Chapter.
- Re-conversion is for an erstwhile inter-State co-operative society, through the Tribunal, with two-thirds of Members or three-fourths in value of creditors.
- After sanction, apply under the Multi-State Co-operative Societies Act, 2002 or other law within six months.
- The Central Government may modify the Act's application and make rules.
- The Bill 2026 proposes only a penalty wording change in section 378ZS(6).
Read next
- Section 378C: formation of a Producer Company
- Sections 378J to 378N: co-operative society to Producer Company
- Sections 378ZN to 378ZP: merger, disputes and strike off
- How to convert a Producer Company into a private limited company
Disclaimer: Based on the Companies Act, 2013 as amended up to 1 April 2021 (official consolidated text), read with later developments noted in the article; proposals in the Corporate Laws (Amendment) Bill, 2026 are pending and not law as on 30 September 2026. Verify current notifications and rules before acting.