Skip to content

CS Executive · Company Law and Practice · Key Managerial Personnel and their Remuneration

Anita is the company secretary of Sagar Foods Ltd. The company wants her to hold the same whole-time KMP office in an unrelated company, Lotus Pharma Ltd, at the same time. What is the position under Section 203(3)?

She cannot do so. Section 203(3) says a whole-time key managerial personnel shall not hold office in more than one company at the same time, except in its subsidiary. Board permission only lets a KMP be a director of another company, not hold a KMP office.

  1. APermitted if the Board of Sagar Foods Ltd approves it
  2. BNot permitted, because a whole-time KMP cannot hold office in more than one company except its subsidiaryCorrect
  3. CPermitted if she files a return with the Registrar
  4. DPermitted for a period of up to six months only

Explanation

Section 203(3) bars a whole-time KMP from holding office in more than one company at the same time, except in its subsidiary. Board permission only allows the KMP to be a director of another company, not to hold a KMP office there.

Did you get it right without looking?

One question tells you little. A timed set on Key Managerial Personnel and their Remuneration shows your real accuracy, how long you take and where you lose marks.

Practise Key Managerial Personnel and their RemunerationFree diagnostic mock

More Key Managerial Personnel and their Remuneration questions