CMA Intermediate · Business Laws and Ethics · Key Managerial Personnel
How must a whole-time key managerial personnel of a company be appointed under Section 203 of the Companies Act, 2013?
A whole-time KMP is appointed by a resolution of the Board that sets out the terms and conditions of appointment, including the remuneration. Section 203(2) does not require a members' resolution or any approval from the Registrar or Central Government for this appointment.
- ABy an ordinary resolution passed at a general meeting of members
- BBy a resolution of the Board containing the terms and conditions including the remunerationCorrect
- CBy the Registrar of Companies on application of the company
- DBy a special resolution with approval of the Central Government
Explanation
Section 203(2) requires every whole-time KMP to be appointed by a Board resolution that contains the terms and conditions of appointment, including remuneration. No general meeting resolution or government approval is required under this sub-section.
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