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Companies Act

Appointment of KMP and its Procedure

December 6, 2020 by Team Instabizfilings

Blog Details

The Companies Act, 2013, define KMP as the executive management. The executive management of the company is responsible for the day to day management of the company. The KMP are the first point of contact between the company and its stakeholders. Chapter XIII of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 deal with legal and procedural aspects of appointment of KMP.

 

A Whole-time KMP shall not office in more than one company except in the subsidiary company at the same time. However, he can hold directorship in other companies with the permission of the Board

 

> According to section 2(51) of Companies Act, 2013, KMP is defined as in relation to a company, means

1. The Chief Executive Officer [Sec 2(18)] or the Managing Director [Sec 2(54)] or the Manager [Sec 2(53)]

2. The Company Secretary [Sec 2(24)]

3. The Whole-time Director [Sec 2(94)]

4. The Chief Financial Officer [Sec 2(19)]

5. Such other officer, not more than one level below the directors who is in whole-time employment, designated as KMP to the Board

6. Such officer as maybe prescribed                                                                                                                                                                                                                                                                                  >

Mandatory Appointment of KMP for the following  Companies [Section 203 and Rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

1. All the Listed Company

2. All Public Company whose paid up capital is rupees 10 crore or more

 

> Appointment of Managing Director, Whole Time Director or Manager

1. No shall appoint or re-appoint any person as it MD/WTD/Manager for a term exceeding 5 years

2. No Company shall appoint or continue the employment of any person as MD/WTD/Manager who-

       a. is below the age of twenty-one years or has attained the age of seventy years

       b. is an undischarged insolvent or has at any time been adjudged as an insolvent

       c. has at any time suspended payment to his creditors or makes, or has at any time made, a composition with them

       d. has at any time been convicted by a court of an offence and sentenced for a period of more than six months.

 

    Steps

                                                                    Procedure

       1    

   Convene Board Meeting to approve the following matter

      > To take decision on the person to be appointed as MD/WTD/Manager

      > Approve the draft agreement for the appointment

      > Approve the notice of Board Meeting with the explanatory statement

       2

   Hold the General meeting and passed the necessary resolution for the appointment of the same

       3

   Execute the agreement as approved by the Board

       4

   Make the necessaries entries in the register of directors, other records and registers of the company

       5

   File the following e-forms with ROC

        >  e-form MR-1 within 60 days of the appointment along with other documents

        >  e-from MGT-14 within 30 days of passing of Resolution

        >  e-form DIR-12 within 30 days of the appointment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Company Secretary

1. A CS shall not hold office in more than one company other than in its subsidiary company at the same time

2. He must have CS as its qualification

 

> APPOINTMENT OF COMPANY SECRETARY

 [Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

 

1. For every Listed Company

2. All Companies whose Paid up capital is rupees 10 crore or more

    Steps

                                                                 Procedure

       1

    Convene Board Meeting to approve the following matter

          > To take decision on the person to be appointed Company Secretary

          > Approve the draft agreement for the appointment

          > Approve the notice of Board Meeting with the explanatory statement

      2

    Execute the agreement as approved by the Board

      3

    Make the necessaries entries in the register of directors and KMP under section 170 of the act

      4

    File the following e-forms with ROC

           >e-form MR-1 within 60 days of the appointment along with other documents

           >e-from MGT-14 within 30 days of passing of Resolution

           >e-form DIR-12 within 30 days of the appointment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Appointment of the other KMP’s procedure are same as procedure for appointment of Company secretary


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