Lets understand KMP Key Managerial Personnel

Key Managerial Personnel

Definition: Key Managerial Personnel in relation to a company, means-

1.    CEO or Managing Director or manager.

2.    The Company Secretary

3.    The Whole Time Director

4.    The Chief Financial Officer

5.    Such other officer as may be prescribed

Every listed company and every other public company having paid up capital of 10crores or more must have KMPs.

Classes of companies required to appoint Key Managerial Personnel:-

As per Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following class of Companies, namely

• Every listed company, and
• Every other public company having paid up share capital of Rs. 10 Crores or more

shall have the following whole-time key managerial personnel,—

(i) Managing Director, or Chief Executive Officer or manager and in their absence, a whole-time director;

(ii) Company secretary; and

(iii) Chief Financial Officer

Further, as per recently notified Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a company other than a company which is required to appoint a whole time key managerial personnel as discussed above and which is having paid up share capital of Rs. 5 Crores or more shall have a whole time Company Secretary.

Whole time Key managerial personnel not to hold office in more than one company:

A company may appoint or employ a person as its managing director, if he is the managing director or manager of one, and of not more than one, other company, by fulfilling the following conditions:

·       Such appointment is approved by resolution passed in board meeting.

·       Specific notice has been given to all the directors.

PROCEDURE OF APPOINTMENT OF KMP:-

Below given is procedure for appointment of Key Managerial Personnel:

First Step

Convene A Board Meeting: To alter the object clause in memorandum of association of Company by giving Notice of at least 7 days, if article not so provided.

Second Step

Hold the Board Meeting:

• At the Board meeting pass a resolution for appointment of Key Managerial Personnel.
• Such Board Resolution must be subject to approval of Share holder.
• Get the Approval of Shareholder for such Appointment in subsequent General Meeting.

Third Step

Filing and fees:

I) File FORM NO. MGT-14

[Filing of Resolutions to the Registrar under section 179(3) Rule 8(2) and Section 117(3)(c) ] with the Registrar along with the requisite filing within 30 days of passing the Board resolution, along with given documents:-

• Certified True Copies of the Board Resolutions;
• Appointment agreement of KMP

II) File FORM NO. DIR-12:- (Filing of particulars of appointment to the Registrar under section 15 Rule 8) with the Registrar along with the requisite filing within 30 days of passing the Board resolution, along with given documents:-

·         Appointment Letter

·         DIR-2 “Consent of Director”

·         DIR-8 “Non Disqualification of Director”

·         Directorship in other Companies

III) File FORM NO. MR-1:- (Filing of Return of Appointment to the Registrar under section 196 Rule 3) with the Registrar along with the requisite filing within 60 days of passing the Board resolution, along with given documents:-

• Certified true copy of Board Resolution
• Copy of letter of consent to act as a managing director, whole time director, or manager.

Tenure:

Appointment of Managing Director, Whole – Time Director or Manager shall not for a term exceeding five years at a time.

Re-appointment:

The company may re-appointment them for next term before expiry of their present term but not earlier than one year before expiry of the current term. This means, company may re-appoint them for next term in last one year of current term.

For more details, contact us at CS Neha Seth & Associates at csnehaseth@gmail.com or call us at +919871903449