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

Rohit is the whole-time Chief Financial Officer of Alpha Ltd. He is invited to be the whole-time CFO of Beta Ltd, which is not a subsidiary of Alpha Ltd. Under Section 203, what is the position?

Rohit cannot hold the whole-time CFO office in both companies. A whole-time KMP may not hold office in more than one company at the same time, except in its subsidiary company, and Beta is not Alpha's subsidiary. Member approval does not change this.

  1. APermitted, since a CFO may hold office in any two companies
  2. BNot permitted, as a whole-time KMP shall not hold office in more than one company except its subsidiaryCorrect
  3. CPermitted if the members of both companies approve by ordinary resolution
  4. DPermitted only if Rohit holds no shares in either company

Explanation

Section 203(3) bars a whole-time KMP from holding office in more than one company at the same time, except in its subsidiary. Beta is not a subsidiary of Alpha, so the second office is not allowed. The proviso allowing directorship with Board permission concerns being a director, not a second whole-time KMP office.

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