CMA Intermediate · Business Laws and Ethics · Key Managerial Personnel
Under the Companies Act, 2013, how must a whole-time key managerial personnel of a company be appointed?
A whole-time key managerial personnel must be appointed by a resolution of the Board that sets out the terms and conditions of appointment, including the remuneration. The Act does not require a members' resolution or Registrar approval for this appointment.
- 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 appointment issued by the promoters
- DBy approval of the Registrar of Companies
Explanation
Section 203(2) requires every whole-time KMP to be appointed by a Board resolution that contains the terms and conditions, including remuneration. A members' resolution or Registrar approval is not what the section prescribes.
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