CS Executive · Company Law and Practice · Directors
Rohan Pharma Ltd intends to appoint its Chief Financial Officer, Mr. Iyer. Under the Companies Act, 2013, how must a whole-time key managerial personnel be appointed?
A whole-time key managerial personnel such as a CFO is appointed by a resolution of the Board that sets out the terms and conditions of appointment, including remuneration. Shareholder resolutions are not the prescribed mode under the Companies Act, 2013.
- ABy an ordinary resolution of members at a general meeting
- BBy a resolution of the Board containing the terms and conditions including remunerationCorrect
- CBy the Nomination Committee alone, without a Board resolution
- DBy a special resolution of members filed with the Registrar
Explanation
Section 203(2) requires every whole-time KMP to be appointed by a Board resolution containing the terms and conditions of appointment, including remuneration. Member approval is not the prescribed route for such appointment.
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