Four different money flows
A producer can receive payment for produce, a later withheld-price payment, limited return on shares and patronage bonus where lawfully approved. These have different bases. Share capital is ownership funding; it is not a purchase invoice or member deposit. Explain the terms before procurement so members know when ordinary payment is due and what is contingent on a later decision.
Withheld price
Under section 378E, the Board may determine an initial value for produce supplied and retain a withheld portion for later disbursement in the manner permitted by the Act and Articles. Maintain member-wise quantity, grade, agreed valuation, initial payment and balance. Withheld price is not simply a convenient label for an unexplained overdue payment. Reconcile the liability and communicate the settlement basis and timing.
Limited return
Limited return relates to share capital and the rate and conditions specified by the Articles and Act. It is not a guaranteed interest rate on a savings account. Check the lawful availability of surplus, required reserves, recommendation and approval process before making a declaration. Do not promise a fixed annual return in membership mobilisation material without the legal basis and qualification.
Patronage bonus
Patronage bonus allocates eligible surplus in proportion to members’ participation in the business, subject to section 378E, Articles and approval. Define the measure of participation: quantity, value or another lawful, consistently applied basis. Keep the calculation auditable, account for quality or service differences where the approved policy requires them, and distinguish the bonus from the price paid for produce.
Reserves and communication
Section 378Z-I requires a general reserve each financial year in addition to other reserves. Do not assume a universal 20% appropriation requirement without a basis in the applicable Articles or other condition. Prepare an appropriation proposal showing reserves, limited return and proposed patronage distribution. Give each member a statement separating shares, produce payments, withheld price, bonus and deductions. Resolve calculation queries before disbursement.
Example: If a duly approved ₹1,00,000 patronage pool is distributed solely by eligible supply quantity of 50,000 kg, the rate is ₹2/kg. A member with 1,200 eligible kg receives ₹2,400. This does not determine their produce price or limited return, and assumes the approved policy permits this quantity-only basis. Check tax consequences separately.
Editable tools
Open a tool, complete the yellow fields and save a completed copy. For offline use, download this kit first. No entries are uploaded or automatically saved. These tools are adapted worksheets, not prescribed statutory forms.
- Member benefit allocation sheet · Download HTML
- Member account and benefits statement · Download HTML
Related register formats
Sources and further reading
- Companies Act, 2013 — Chapter XXIA and applicable general provisions
- Income Tax Department — current law, forms and tax calendar
Read legal references with amendments and current Rules. Scheme windows and application availability are not confirmed by inclusion here. The case-law module explicitly identifies the verification limits of its reported example.