Listed Company - Summary of provisions on Key Managerial
Personnel
Every listed company
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 :
Provided that an
individual shall not be appointed or reappointed as the chairperson of the
company, in pursuance of the articles of the company, as well as the managing
director or Chief Executive Officer of the company at the same time after the
date of commencement of the Act unless,—
(a) the articles of
such a company provide otherwise; or
(b) the company does
not carry multiple businesses:
Provided further that
nothing contained in the first proviso shall apply to such class of companies
engaged in multiple businesses and which has appointed one or more Chief
Executive Officers for each such business as may be notified by the Central Government.
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.
A whole-time key
managerial personnel shall not hold office in more than one company except in
its subsidiary company at the same time:
Provided that nothing
contained in this sub-section shall disentitle a key managerial personnel from
being a director of any company with the permission of the Board:*
Provided further that
whole-time key managerial personnel holding office in more than one company at
the same time on the date of commencement of the Act, shall, within a period of
six months from such commencement, choose one company, in which he wishes to
continue to hold the office of key managerial personnel:
Provided also that 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
and such appointment or employment is made or approved by a resolution passed
at a meeting of the Board with the consent of all the directors present at the
meeting and of which meeting, and of the resolution to be moved thereat,
specific notice has been given to all the directors then in India.
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 six months
from the date of such vacancy.
If a company
contravenes the provisions of this section, the company shall be punishable
with fine which shall not be less than one lakh rupees but which may extend to
five lakh rupees and every director and key managerial personnel of the company
who is in default shall be punishable with fine which may extend to fifty
thousand rupees and where the contravention is a continuing one, with a further
fine which may extend to one thousand rupees for every day after the first
during which the contravention continues.
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