Skip to content

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

Zenith Engineering Ltd wants to appoint Mr. Bose as managing director. He is already the managing director of one other company, Orbit Ltd, which is not its subsidiary. Which condition must be met under Section 203?

The appointment is permitted only if made or approved by a Board resolution with the consent of all directors present, after specific notice of the meeting and resolution to all directors then in India. He may be MD or manager of at most one other company.

  1. AThe appointment needs a resolution at a Board meeting with consent of all directors present, after specific notice of the meeting and resolution to all directors then in IndiaCorrect
  2. BThe appointment needs a majority of directors present to consent at a Board meeting with seven days' notice
  3. CThe appointment is barred absolutely because he already holds office elsewhere
  4. DThe appointment needs only a members' ordinary resolution

Explanation

The third proviso to Section 203(3) allows a company to appoint a person as MD if he is MD or manager of one, and not more than one, other company. The appointment must be made or approved by a Board resolution with the consent of all directors present, and specific notice of the meeting and the resolution must be given to all directors then in India. A bare majority is insufficient.

Did you get it right without looking?

One question tells you little. A timed set on Key Managerial Personnel and their Remuneration shows your real accuracy, how long you take and where you lose marks.

Practise Key Managerial Personnel and their RemunerationFree diagnostic mock

More Key Managerial Personnel and their Remuneration questions