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

Under the Companies Act, 2013, how must every whole-time key managerial personnel be appointed?

A whole-time KMP must be appointed by a resolution of the Board that sets out the terms and conditions of appointment, including the remuneration. The appointment is a Board decision, not one made by the Registrar or solely by a committee.

  1. ABy an ordinary resolution of members stating remuneration only
  2. BBy a resolution of the Board containing the terms and conditions of appointment including remunerationCorrect
  3. CBy an order of the Registrar of Companies
  4. DBy a nomination from the Audit Committee without a Board resolution

Explanation

Section 203(2) requires appointment by a Board resolution that contains the terms and conditions, including remuneration. A members' resolution is not the prescribed mode here, and the Registrar does not appoint KMP.

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