About Key Managerial Personnel Of The Company

Key Managerial Personnel (referred to as KMP) is the whole-time employees of the company who are empowered with certain essential functionalities and roles. They are the starting point for the contact between the company and its stakeholders and are responsible for the formulation and implementation of strategies. Section 203 of the Act read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 specifies that every Listed company and every other public company having a paid-up share capital of Rs 10 crore or more shall have a following whole-time key managerial personnel A managing director is someone who oversees the daily operations of a corporate or corporate division. He is entrusted with substantial powers of management of the company and is in charge of the company’s affairs. He/she is also expected to keep a company solvent and promote its expansion and growth. In other countries, managing directors generally work as the heads of individual business units of a company rather than heading up the company as a whole. As per Section 2(54) of the Companies Act, 2013, managing director means a director who by the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called. The explanation of section 2(54) of the companies excludes the following powers from the preview of administrative acts of a routine nature: [Note: As per the definition of Managing director, a managing director must be a director of the company, hence if a company wants to appoint any person as managing director of the company, who is not a director of the company, first he has to be appointed as a director or an additional director.] The company can appoint a Managing director for 5 years, in any of the following ways unless one of the following five procedures is expressly stipulated in the Article of Association of the company: A managing Director cannot be appointed for a term exceeding five years at a time. He/she can be reappointed for another term, but such re-appointment shall be made earlier than one year before the expiry of his term. Appointment of Managing Director, who is Managing Director of Another Company Section 203(3) of the Companies Act, 2013 specifies that the Managing Director shall not hold office in more than one company except in its subsidiary company at the same time. A company may appoint a managing director who is already the managing director of not more than one other company and such appointment is approved by a resolution passed at a meeting of the Board with the consent of all the directors present at the meeting. The following are the essential qualifications for holding the position of Managing Director: However, a person above the age of 70 years may be appointed as Managing Director by passing a special resolution and the explanatory statement attached to the notice shall indicate the justification for appointing such a person. Appointment of Managing Director shall be made as per Section 196 and its remuneration should be as per Section 197 and Schedule V of the Companies Act, 2013. However, Provisions relating to managerial remuneration do not apply to a private company. 1. Convene and hold a Board meeting after giving 7 days’ notice to all the directors for transacting the following business: 2. Collect the following document from the proposed appointee: 3. File e-form MGT-14 with ROC within 30 days from the date of passing of board resolution along with a copy of the board resolution and along with prescribed fees. 4. Issue a Notice of General Meeting at least 21days before the General meeting to a member of the company. 5. Convene and hold the general meeting of members and pass a resolution for approving the appointment of the managing director. If the age of the proposed Managing Director is more than 70 years, then the appointment has been approved by passing a special resolution. 6. File the following e-forms with the ROC The company shall file a return of appointment of the managing director with the ROC in Form MR -1, within sixty days from the date of appointment of Managing Director. The e-form requires the detail of the CIN of the company, DIN for the Proposed appointee, tenure of appointment, remuneration, and SRN of e-form MGT-14. The following documents are mandatory to attach with form MR-1 Form MR-1 is digitally signed by the Director/Manager/Company Secretary/CEO/CFO of the company who has been authorized by a board resolution and certified by CA/CA/CMA in whole-time practice. The form will be processed in STP mode and on submission of the form, SRN will be generated and the form will be approved. Particular appointment of managing Director shall be filed with ROC within thirty days from the date of appointment of managing director. The following documents are mandatory to attach with form MR-1 The E-form DIR-12 needs to be digitally signed by the Director so authorized by the Company in its Meeting and certified by a CA/CS/CMA in Whole-time practice. This form also will be processed in STP mode and on submission of the form, SRN will be generated and the form will be approved. The e-form MGT-14 shall file with ROC within 30 days from the date of appointment. This form is filed only when the age of the proposed Managing Director is more than 70 years. 7. Execute the agreement with the managing director as approved by the Board of directors of the company 8. Make necessary entries of appointment of Managing Director in the register of directors and other records and registers of the company. Onlinexbrl.com, is the leading platform for legal and Compliance Services, Book your Consultation now.
Managing Director
Definition of Managing Director:
Point To Be Remembered:
Different Ways For Appointment Of Managing Director:
Tenure of Managing Director:
Eligibility Criteria For Appointment Of Managing Director:
Role and Responsibility of Managing Director:
Procedure for Appointment of Managing Director:
i. Form MR -1:
ii. Form DIR – 12
iii. Form MGT-14:
Individual Government fees for Form DIR-12, MR-1, and MGT-14
Nominal Share Capital
Fee applicable
Less than 1,00,000
Rs 200
1,00,000 to 4,99,999
Rs 300
5,00,000 to 24,99,999
Rs 400
25,00,000 to 99,99,999
Rs 500
1,00,00,000 or more
Rs 600