• Manufacturer Identification for Company A

Company A, a brand owner for consumer home care products (e.g., laundry detergent, floor cleaner, dishwash gel), desires to be publicly identified as the manufacturer of its products, both for its own brand and those supplied to other brands (via private label agreements). Company A is a private limited company, registered in Karnataka with a registered office in Gujarat, and holds Startup India and MSME registrations.

Company B, the current manufacturer, is located in Gujarat and has not yet needed a specific license to manufacture detergents, they have regular approvals to run a manufacturing facility. The question is whether there are any legal hurdles to ensure Company A can be publicly identified as the manufacturer, considering applicable regulations, including but not limited to:

Legal Metrology Act
Consumer Protection Act
State Pollution Control Acts

Clarifications:
1. The products being manufacturer do not fall under Drugs and Cosmetics Act and/or are not medical devices
2. No Ayush product involved
Asked 11 days ago in Business Law

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12 Answers

Subject to agreement  between A & B there is no hurdle for A to be identified as product manufacturer of goods manufactured by it provided all permission including  BIS Registration and IS 4955-1968 are obtained. Even B needs all permission including  BIS Registration and IS 4955-1968. All products by B has to carry declaration  that  goods are manufactured by B. Products by B cannot be declared by manufactured by A. It can be marketed by A as seller, not as manufacturer.

Ravi Shinde
Advocate, Hyderabad
4523 Answers
42 Consultations

The legal metrology package, commodity rules, 2011, make it mandatory for the labels to mention mandatory labels on the package product offered for sale by the retail business owner. These declarations include generic  name of the product ,name and address of the Packer and manufacturer, net quantity, date  of manufacturing, etc 

 

you can mention that A is manufacturer 

 

 

 

Ajay Sethi
Advocate, Mumbai
97716 Answers
7915 Consultations

Company A cannot be legally identified as the "manufacturer" unless it owns/controls the facility or undertakes manufacturing itself.

Legal Compliance:


  1. Legal Metrology Act – Only the actual producer (Company B) can be labeled as the "Manufacturer." Company A can be "Marketed by" but not "Manufactured by."

  2. Consumer Protection Act – Misrepresentation as a manufacturer can lead to legal liability.

  3. Pollution Control Laws – No new compliance needed unless Company A starts manufacturing.

Solution:

  • Use "Marketed by Company A" instead of "Manufactured by."
  • Consider a job work model where Company A controls raw materials & production.
  • Register a manufacturing unit if full control is needed.

For detailed, personalized advice, consider a phone consultancy. Hope you find the information helpful. You are free to contact me for further discussion. If you could spare two minutes of your time to write a review, it would be greatly appreciated and bring immense happiness to read it. Thank you. Shubham Goyal.

Shubham Goyal
Advocate, Delhi
667 Answers
3 Consultations

but i'd like to know whether company A is actually doing the manufacturing?

Yusuf Rampurawala
Advocate, Mumbai
7780 Answers
79 Consultations

A loan licensing agreement could work, but under the Legal Metrology Act, only the actual manufacturer (B) can be labeled as such. To be identified as the manufacturer, Company A must either:

  1. Control production via job work
  2. Lease/rent the facility & operate under its name
  3. Ensure compliance with labeling laws

For detailed, personalized advice, consider a phone consultancy. Hope you find the information helpful. You are free to contact me for further discussion. If you could spare two minutes of your time to write a review, it would be greatly appreciated and bring immense happiness to read it. Thank you. Shubham Goyal.

 

Shubham Goyal
Advocate, Delhi
667 Answers
3 Consultations

Losn kicensing agreement can be executed between A and B where A is the manufacturer and B avails  manufacturing facilities of A 

Ajay Sethi
Advocate, Mumbai
97716 Answers
7915 Consultations

Dear Client,

 

Company A can be publicly identified as the manufacturer of its consumer home care products if it either owns or controls the manufacturing process. Under the Legal Metrology Act, only the actual manufacturer can be named as such unless Company A has a contractual arrangement granting full operational control over production. Liability is also placed on manufacturers with respect to the quality of their products, making it important that Company A acceptliability through a well-drafted private label agreement with Company B. Detergents contain chemical formulations and hence, it would be prudent for the State Pollution Control regulations to be adhered to along with environmental clearances if there are waste disposal concerns. To legally claim its manufacturer status, Company A shall amend agreements by setting up manufacturing control, agreeing to proper compliance with labeling of the product sold, and othernecessary licenses along with regulatory acceptance. If all thesecannot be achieved, there is a startingpoint of either being a marketer while working up to set one's own manufacturers. It's advisable to call a legal attorney for contract construction and compliance acquisition.

Anik Miu
Advocate, Bangalore
10455 Answers
121 Consultations

  1. Any declaration of products manufactured by B as manufactured by A amounts to making false statement attracting various penal provisions.
  2. Certain legal liabilities and duties are imposed on manufacturer of products, hence the entity actually manufacturing can only of labeled as manufacturer. No one can hoodwink law without attracting penalty.  

Ravi Shinde
Advocate, Hyderabad
4523 Answers
42 Consultations

the above company is a service provider and is covered under consumer protection Act 2019

Prashant Nayak
Advocate, Mumbai
33017 Answers
214 Consultations

In India, a company (A) cannot typically sell another company's (B) product under its own manufacturing license, as this would violate the regulations governing product licensing and could lead to legal repercussions; each company must hold its own manufacturing license to sell products under its brand and responsibility. 

In such a situation, it would be common practice for the parties to enter into a trade mark licence agreement, either as a separate document, or as part of the contract relating to the business solution.

There would be nothing to stop Company A from including a provision in such a licence requiring company B to cease the use of its brand name once the licence is terminated.

T Kalaiselvan
Advocate, Vellore
87918 Answers
2368 Consultations

According to the Legal Metrology Act in India, a company (like Company A) cannot sell another company's (like Company B) product under its own manufacturing license; a manufacturing license is not transferable and must be linked to the specific manufacturer of the product, meaning each company needs its own license to sell their respective goods. 

Selling products under a different company's license could result in legal penalties.

Each company is responsible for ensuring their products comply with legal metrology standards and must hold their own license to manufacture and sell products. 

If any name and address of a company is mentioned on the label without any qualifying words 'manufactured by' or 'packed by', it shall be presumed that such name and address shall be that of the manufacturer and the liability shall be determined accordingly.

If the brand name and address of the brand owner appear on the label as a marketer, then the brand owner shall be held responsible for any violation of these rules and action as may be required shall be initiated against the deemed manufacturer and in the event of more than one name and address appearing in the label, prosecution shall be launched against the manufacturer indicated on the label in the first place and not against all of them.

T Kalaiselvan
Advocate, Vellore
87918 Answers
2368 Consultations

Company A can be publicly identified as the manufacturer of its home care products by entering into a loan licensing agreement or a contract manufacturing agreement with Company B. Since the products do not fall under the Drugs and Cosmetics Act, Ayush regulations, or medical device laws, there is no formal requirement for a loan license. However, under the Legal Metrology (Packaged Commodities) Rules, 2011, the label must mention the actual manufacturer, unless Company A is categorized as a packer or marketer. To legally list Company A as the manufacturer, the agreement should explicitly transfer the manufacturing responsibility to A, ensuring it meets Consumer Protection Act obligations regarding product quality and liability. Additionally, compliance with state pollution control regulationsmust be ensured if any manufacturing process changes occur. If BIS certification is required for synthetic detergents but not for natural ingredient-based formulations, A should ensure proper classification to avoid regulatory issues. The best approach is a contract manufacturing arrangement, where B manufactures on behalf of A, with A being legally responsible and identified as the manufacturer.

Aman Verma
Advocate, Delhi
318 Answers

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