Procedure to appoint Key Managerial Personnel (KMP)

     

Key Managerial Personnel (KMP)

Section 203 of the Act read with Rule 8 of the Companies (Appointment And Remuneration of Managerial Personnel) Rules,2014 provides that every Listed company and every other public company having a paid up share capital of ten crore rupees or more shall have whole-time key managerial personnel comprising of

    –   Managing director ;

   –  Chief executive officer (CEO) or manager and in their absence , a whole time director;

–     Company secretary ;and

–     Chief financial officer (CFO).

Thus, private companies and public companies with a paid up share capital of less than ten crore rupees have been exempted from appointing key managerial personnel.

An individual shall not be appointed or reappointed as the chairperson of the company as well as the managing director or CEO of the company at the same time unless, the articles provide otherwise or company does not carry multiple businesses. However, such class of companies engaged in multiple businesses and which has appointed one or more CEOs for each such business as may be notified by the Central Government are exempt from the aforesaid provision.

If the office of any whole time key managerial personnel is vacated, the resulting vacancy shall be filled up by the Board at a meeting of the board within a period of 6 months from the date of such vacancy.

If a company contravenes the provisions relating to appointment of whole time key managerial personnel, the company shall be punishable with fine and every director and key managerial personnel of the company who is in default shall also be punishable with fine.

               Procedure to appoint Key Managerial Personnel (KMP)

1. Hold the Board meeting in consideration with appointment of key managerial personnel and pass the Board resolution containing the terms and conditions of the appointment.

2. A whole time Key Managerial Personnel shall not hold office in more than one company except in its subsidiary at the same time

3.  A company may appoint or employ a person as its managing director, if he is the managing director or manager of one, and of not more than one, other company and such appointment or employment is made or approved by a resolution passed at a meeting of the Board with the consent of all the directors present at the meeting and of which meeting, and of the resolution to be moved thereat, specific notice has been given to all the directors then in India.

4.  On vacation of the office of a whole time Key Managerial Personnel , the resulting vacancy shall be filled- up by the Board at a meeting of the Board within a period of 6 months.

5.   File with the Registrar the Form MGT-14 and a return of appointment of a managing director, whole time director or manager in Form MR-1.

6.  File DIR-12 along with the fee prescribed in Companies(Registration of Offices and Fees) Rules, 2014.

Related Posts :

Draft Board Resolution for Appointment of KMP

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