CMA Final · Corporate and Economic Laws · Prevention of Oppression and Mismanagement
Under section 202 of the Companies Act, 2013, to which of the following persons may a company pay compensation for loss of office?
A company may pay compensation for loss of office only to a managing director, a whole-time director or a manager. Section 202(1) expressly excludes any other director, so independent, nominee and non-executive directors cannot receive such compensation.
- AA managing directorCorrect
- BAn independent director
- CA nominee director
- DAny non-executive director
Explanation
Section 202(1) permits payment to a managing or whole-time director or manager, but not to any other director. The other three options are directors who are not managing or whole-time directors, so compensation cannot be paid to them.
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