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

The company secretary of Kaveri Textiles Ltd resigned on 1 March. Under the Companies Act, 2013, by when must the Board fill the resulting vacancy in the office of a whole-time KMP, and how?

The vacancy must be filled by the Board at a meeting of the Board within six months from the date the vacancy arose. It is a Board function, not a member or committee function, and the six-month period runs from the vacancy date.

  1. AWithin three months, by a resolution passed in general meeting
  2. BWithin six months from the date of vacancy, at a meeting of the BoardCorrect
  3. CWithin six months, by the Nomination Committee alone
  4. DWithin one year, by circular resolution of members

Explanation

Section 203(4) requires the Board to fill the vacancy at a Board meeting within six months from the date of vacancy. The general meeting is not the forum, so A is wrong. Committee action alone, as in C, does not satisfy the requirement.

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