CMA Intermediate · Business Laws and Ethics · Key Managerial Personnel
Under Section 203(2), how must a whole-time key managerial personnel of a company be appointed?
A whole-time key managerial personnel is appointed by a resolution of the Board that sets out the terms and conditions of appointment, including the remuneration, as Section 203(2) provides. A members' resolution or Registrar approval is not the stated mode.
- ABy an ordinary resolution of members at a general meeting
- BBy a resolution of the Board containing the terms and conditions of appointment including remunerationCorrect
- CBy a letter of the promoters approved by the Registrar
- DBy a resolution of the audit committee alone, without remuneration terms
Explanation
Section 203(2) says every whole-time KMP shall be appointed by a resolution of the Board containing the terms and conditions, including the remuneration. Member approval at a general meeting is not what this sub-section prescribes.
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