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

Kaveri Foods Ltd proposes to appoint Mr. Rao as its Chief Financial Officer. Under Section 203, how must this whole-time KMP be appointed?

The CFO must be appointed by a resolution of the Board that contains the terms and conditions of appointment, including remuneration. Section 203(2) prescribes this for every whole-time KMP, so a members' resolution or Registrar approval is not what the section requires.

  1. ABy an ordinary resolution passed by members at a general meeting
  2. BBy a special resolution passed by members at a general meeting
  3. CBy a resolution of the Board containing the terms and conditions including remunerationCorrect
  4. DBy approval of the Registrar on application in writing

Explanation

Section 203(2) requires every whole-time KMP to be appointed by a Board resolution that sets out the terms and conditions of appointment, including remuneration. Members' resolution is not the prescribed mode under this sub-section. The Registrar does not approve such appointments.

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