Under sec 2(51) of the Companies Act, 2014, KMP or Key Management Personnel are the main in charge of maintaining operation. These personnel’s are:
Whole time director
Chief Executing Officer/Manager/Managing Director
Chief Financial Officer (CFO)
Company Secretary (CS)
Any other officer prescribed by the government
According to rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) act 2013, states that it is mandatory for all the listed companies and public companies having share up capital of INR 10 crore to appoint KMP.
In addition to new rule 8(A), all public companies having a paid-up share capital of INR 5 crore has to appoint a Whole Time Company Secretary as KMP mandatorily.
Section 203 of the companies act, draws some guidelines under which KMP can be appointed:
The KMP’s are solely responsible for taking the important decisions and managing all the employees in the company. The growth and development of the company depend on the effective working of the KMP. The main responsibilities and functions of the KMP are:
Violating the provision of sec 203, will lead to
It has been rendered under the Act that the role or designated Chairman and Managing Director or Chairman and Chief Executive Officer should not be given to the same person
However, in the following circumstances, the above restriction will not apply: