Skip to content

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

Sunil is the chairperson of Meghdoot Foods Ltd under its articles and is proposed as its managing director as well. The company carries a single business and its articles are silent on the matter. Under the first proviso to Section 203(1), what is the position?

The dual appointment is allowed because the company does not carry multiple businesses. The proviso prohibits one person being chairperson under the articles and MD or CEO together unless the articles provide otherwise or the company is not in multiple businesses; the second condition is met here.

  1. ANot allowed in any case, as the roles must always be separate
  2. BAllowed, because the company does not carry multiple businessesCorrect
  3. CAllowed only with prior Central Government approval
  4. DAllowed only if Sunil holds more than 10% shares

Explanation

The first proviso bars the same individual being chairperson (per articles) and MD or CEO unless the articles provide otherwise or the company does not carry multiple businesses. Meghdoot has one business, so exception (b) applies. Option A ignores both exceptions.

Did you get it right without looking?

One question tells you little. A timed set on Key Managerial Personnel and their Remuneration shows your real accuracy, how long you take and where you lose marks.

Practise Key Managerial Personnel and their RemunerationFree diagnostic mock

More Key Managerial Personnel and their Remuneration questions