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

The CFO of Mehta Steels Ltd resigned on 1 March. As per Section 203, within what period must the Board fill the resulting vacancy, and how?

The Board must fill the vacancy at a Board meeting within six months from the date of the vacancy, under Section 203(4). The appointment is made by the Board, not the general meeting.

  1. AWithin three months, by a resolution passed at a general meeting
  2. BWithin six months, by the Board at a Board meetingCorrect
  3. CWithin thirty days, by circulation among directors
  4. DWithin one year, by the Nomination Committee alone

Explanation

Section 203(4) requires a vacancy in the office of a whole-time KMP to be filled by the Board at a meeting of the Board within six months of the vacancy. The general meeting route is wrong because the power rests with the Board.

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