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CMA Final · Corporate and Economic Laws · Board of Directors and Key Managerial Personnel

Rohit is the Chief Financial Officer, a whole-time KMP, of Kaveri Foods Ltd. He wants to hold office as whole-time KMP in another unrelated company, Meru Retail Ltd, at the same time. Which statement is correct under Section 203?

Rohit cannot hold office as whole-time key managerial personnel in an unrelated second company. The Act permits holding office in more than one company only for a subsidiary. Board permission lets a KMP be a director elsewhere, not a whole-time KMP.

  1. AHe may do so if Kaveri Foods Ltd's Board permits it
  2. BHe may do so if the shareholders approve by ordinary resolution
  3. CHe may do so, as only a managing director is restricted
  4. DHe cannot hold office as whole-time KMP in more than one company, except in its subsidiary companyCorrect

Explanation

A whole-time KMP shall not hold office in more than one company except in its subsidiary. The Board permission proviso only allows him to be a director of another company, not a whole-time KMP. The restriction covers all whole-time KMP, not only the managing director.

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