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

Meera Iyer is the whole-time Chief Financial Officer of Kaveri Foods Ltd. She is offered the post of whole-time company secretary in an unrelated company, Sagar Pharma Ltd, which is not a subsidiary of Kaveri Foods. Which statement is correct under section 203(3)?

She cannot hold whole-time KMP office in both companies, because section 203(3) permits multiple offices only in a subsidiary company. The proviso lets a KMP be a director of another company with Board permission, but it does not permit a second KMP post in an unrelated company.

  1. AShe may hold both offices because KMP can hold office in any two companies
  2. BShe may hold both offices if the members pass an ordinary resolution
  3. CShe may hold both only if Sagar Pharma is a private company
  4. DShe cannot hold whole-time KMP office in both, as the exception covers only a subsidiary company; she may however be a director of another company with Board permissionCorrect

Explanation

Section 203(3) bars a whole-time KMP from holding office in more than one company except its subsidiary. The proviso allows only a directorship in any company with Board permission, not another KMP post. Sagar Pharma is not a subsidiary, so the dual KMP role is not allowed.

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