Comment on the following: (a) All Key Managerial Personnel (KMP) are appointed by the members at the Annual General Meeting. (b) Every company with a paid-up capital of ₹50 crore or turnover of ₹250 crore or borrowings o

(a) Under section 203(2) of the Companies Act, 2013, every whole-time key managerial personnel of a company shall be appointed by means of a resolution of the Board containing the terms and conditions of the appointment including the remuneration. The statement is incorrect. As per Section 196(4), Subject to the provisions of section 197 and Schedule V, a managing director, whole-time director or manager shall be appointed and the terms and conditions of such appointment and remuneration payable be approved by the Board of Directors at a meeting which shall be subject to approval by a resolution at the next general meeting of the company and by the Central Government in case such appointment is at variance to the conditions Specified in Part I of that Schedule. However, as per notification of 05.06.2015 this provision is not applicable to private companies. (b) The statement is incorrect. According to Section 203 of the Companies Act, 2013 read with Rule 8 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Every listed company and every other public company having a paid-up share capital of ₹10 crore rupees or more shall have whole-time key managerial personnel. Further as per rule 8A of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Every private company which has a paid up share capital of ₹10 crore rupees or more shall have a whole -time company secretary. The turnover or borrowings of the company are not relevant for appointment of KMPs. (c) The statement is partially correct. Section 203 (4) of Companies Act 2013 states that if the office of any whole-time key managerial personnel is vacated, the resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period of 6 months from the date of such vacancy. In the case of MD/WTD, the appointing authority viz., the members in the AGM appoint a director in place of the vacancy of MD/WTD. However, any casual vacancy in the post of MD/WTD can also be filled up by the BOD by appointing the person as an additional director on the Board u/s 161(1) of the Act. (d) The statement is partially correct. According to Section 203(4A) of the Companies Act, 2013, the provisions of sub-sections (1), (2), (3) and (4) of this section shall not apply to a managing director or Chief Executive Officer or manager and in their absence, a whole-time director of the Government Company. However, the said provisions of Section 203 are equally applicable to appointment of KMPs like CFO and CS in case of Government companies also. (e) The statement is incorrect. Only listed companies are required to report any appointment/change in KMPs under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 within 24 hrs of the appointment/resignation. Other public unlisted and Private limited companies are not required to intimate to stock exchanges.