Section 49 of the Legal Metrology Act, 2009 allows the user to nominate any person as responsible for the conduct of the business under the Legal Metrological Laws. Such a person shall be officially registered under the records of the Legal Metrology authorities who can be held responsible in case of any violation by the Company.
What Is Director Nomination?
Director Nomination is a legal process in which a person is proposed to appoint as a director of legal metrology organization & company. The aim of these nomination is to ensure that a suitable and qualified person is selected to serve on the board of directors.
How Do You Nominate a Director in Legal Metrology?
To nominate a legal metrology cirector companies need to meet the specific eligibility criteria according to the relevant laws and regulatios. The criteria of possessing include the necessary skills, experience, and qualifications, adhering to good corporate governance principles.
Process Of Director Nomination Under Legal Metrology
The process of Director Nomination Under Legal Metrology typically involves submitting a formal nomination form and resolution. The process may include:-
- Shareholder Proposal: In some companies shareholders have right to propose director nominees. This procedure for such proposals vary on the company/s governing documents and local regulations.
- Board Nomination Committee: In many cases companies creata a nomination committe which includes independent directors or senior managers. The committe is responsible for identifying, evaluating, and recommending candidates for director roles.
- Proposed Director Nominee name and contact information.
- Nominee’s qualifications and experience brief statement.
- Category of the director nominee, such as independent director, executive director, or shareholder director.
What Is Nomination Under Section 49 of the Legal Metrology Act?
According to the Section 29 of the legal metrology act, 2009 empowers the central government to nominate and individual as a director of Legal metrology company. This act ensures that the government actively participate in the company management and governance. They focus on the matters related to legal metrology and consumer interest & protection.
How Do You Appoint a Nominee Director?
To choose a nominee director under Section 49 of the legal metrology act, the central government have to follow a procedure:-
- Selection of Nominee: The Central Government identify and select and individual who pass the necessary qualification and experience according to Legal Metrology.
- Communication of Nomination: The Central Government officially cheakes the nominee’s name and credentials to the company.
- Acceptance by the Company: The company’s board of directors or shareholders examine the nomination and conclude whether to accept the nominee’s appointment.
- Formal Appointment: Upon approval by the company, the Central Government orderly designate the nominee as a director, following any legal formalities or requirements specified by the Act.
How Do You Get a Nominee Director?
To obtain a nominее dirеctor and a lеgal mеtrology company can rеquеst thе Cеntral Govеrnmеnt to appoint a nominее dirеctor. The company board of directors or shareholders can forward this request through formal communication. They will outlining the need for the nominee director and the specific qualification they required. The central government check the request and arrange a suitable appointment based on the choice and expertise
Rеason For Dirеctor Nomination Undеr Lеgal Mеtrology
- Govеrnmеnt Ovеrsight: With the help of the nominee directors the central government can exercise oversight over legal metrology companies. Ensure thеy adhеrе to rеgulations, standards and guidеlinеs.
- Consumеr Rеprеsеntation: The nomination director represent the interest of the consumers. This will help to safeguard their right and protect them from unfair practices.
- Expеrtisе and Guidancе: On the matter related to legal metrology, standardization and quality control nominее dirеctors can providе valuablе еxpеrtisе and guidancе to thе company.
- Policy Implеmеntation: This will facilitatеs thе еffеctivе implеmеntation of lеgal mеtrology policiеs and initiativеs.
Situations For Director Nomination Under Legal Metrology
- Situation No. 1: Where the company has done with Director Nomination – In this case if company has committed any offence under Legal Metrology, then persons so nominated with the Department of Legal Metrology shall only be the natural person who can be held responsible by the Legal Metrology Department in case of any violation.
- Situation No. 2: Where the company hasn’t done with any Director nomination – In this case if company has committed any offence under Legal Metrology, then all the officers of the company including the company as artificial person shall be held responsible by the Legal Metrology Department in case of any violation.
Benefits Of Director Nomination Under Legal Metrology
Director nomination is highly beneficial and a helping tool to reduce the penalties and the magnitude of the damage which may cause to company in case of any violation. Since the Legal Metrology Law is Consumer Law, applicable to a wide range of products and given its technical nature which makes it highly prone to being non-complied with by its users. In the event of committal of offence, the user doesn’t only land up with pecuniary penalty but at many places under the law there are provisions of imprisonment as well.
Director nomination not only strategically reduces the number of penalties but also helps to save the non-nominated officers of the company persons from the trial of the court and imprisonments. The companies who have foreign investments in their business and has independent foreign Directors as well always make sure that their foreign Directors should not receive any notice from any Department of India as it may adversely affect their availment of foreign investments.
Can Partnership Firms or Association of Individuals avail Nomination under Legal Metrology?
Since under the Section 49 which is dealing with the Director’s nomination, the word “Company” & “Director” which predominantly gives the impression that only companies are allowed to nominate Directors because of which often it has been doubted whether partnership firms, body corporations, association of individuals, trust, societies. The Government has given the provisions for nominating Directors by these kinds of business entities. Under Section 49, Legal Metrology Act, 2009 legislation has given the explanation wherein the definition of company and Director is explained as below:
- “Company” means anybody corporate and includes a firm or other association of individuals; and
- “Director” in relation to a firm, means a partner in the firm but excludes nominated directors, honorary directors, Government nominated directors.
Vide above explanation, it becomes clear that Partnership Firms, Association of Persons which includes Trust & Societies, can avail the benefit of Director Nomination.
Can Company Nominates any person other than Director?
Section 49(2) clearly states that – “any company may, by Order in writing, authorize any of its Director to exercise all such powers and take all steps as may be necessary or expedient to prevent the commission by the Company of any offence under this Act”. It is pertinent to note the words “any of its Director” in the above text of the Section, as it clearly says that Company can only nominate the Directors which means the Company shall not be able to nominate any other employee or its Company Secretary or its Chartered Accountant etc.
Special Case: Nomination of different persons in case of multiple branches
Where a company has different establishments or branches or different units in any establishment or branch, different persons may be nominated under this sub-section in relation to different establishments or branches or units and the person nominated in relation to any establishment, branch or unit shall be deemed to be the person responsible in respect of such establishment, branch or unit.
Cancellation of Director Nomination under Legal Metrology
Section 49(3) deals with the provisions of cancellation of nomination, following case s has been mentioned under Section 49(3) in which nomination can be cancelled:
- Further notice cancelling such nomination is received from the company by the Director or the concerned Controller or the authorized officer; or
- He ceases to be a director of the company; or
- He makes a request in writing to the Director or the concerned Controller or the legal metrology officer under intimation to the company, to cancel the nomination, which request shall be complied with by the Director or the concerned Controller or the legal metrology officer,
In case when person nominated hasn’t committed any offence?
Section 49(4) clearly states that where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to the neglect on the part of, any director, manager, secretary or other officer, not being a person nominated under sub-section (2), such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Myths about Director Nomination under Legal Metrology:
Past many years of our experience, we learnt that the Board of Directors of the Company could not able to arrive on the successful consensus of nominating any Director since no single Director is willing to accept the responsibility for the compliances of any offence under Legal Metrology, because of which company is never able to arrive on a point wherein the company could able to successfully get the Director Nomination.
We wish to make it clear that if any Director thinks that if he becomes the nominated Director under Legal Metrology done, he shall be the only person who will be held responsible by the Legal Metrology Authorities, then such Director need not to worry as he will be protected under the provisions Section 49(4) which clearly states that if any other officer is proved to be guilty of that offence, then such officer shall be punished instead of the nominated Director.
ELT Corporate Assistance For Director Nomination Under Legal Metrology
ELT Corporate assist you for the director nomination under the expert guidance. Our experts solve all your queries and work on your requirements. Our expert team ensure that the client will get expert assessment and keep all conversation confidential.