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CMA Intermediate · Business Laws and Ethics · Key Managerial Personnel

Rohit is the whole-time company secretary of Alpha Ltd. He is offered a whole-time company secretary post in Beta Ltd., which is not a subsidiary of Alpha Ltd. Under Section 203(3), what is the position?

A whole-time KMP cannot hold office in more than one company at the same time, except in a subsidiary of the company. Since Beta Ltd. is not a subsidiary of Alpha Ltd., Rohit cannot hold both company secretary posts. Board permission only allows directorships elsewhere.

  1. AHe may hold both posts if Alpha's Board permits
  2. BHe may hold both posts if Beta Ltd. pays him a lower salary
  3. CHe cannot hold whole-time KMP office in both companies as Beta is not Alpha's subsidiaryCorrect
  4. DHe may hold both posts if he files a return with the Registrar within thirty days

Explanation

Section 203(3) bars a whole-time KMP from holding office in more than one company, except in its subsidiary. Beta is not a subsidiary, so the dual role is not allowed. Board permission relates only to being a director of another company, not to holding KMP office.

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