Process for Appointment of additional director & Key Managerial Personnel

In this article we will discuss about appointment of additional director and key managerial personnel under companies act and rules.

Additional director (As per Section 161 and  Chapter XI The Companies (Appointment and Qualifications of Directors) Rules, 2014 ]

Additional director is one who can be appointed any time by Board of Director who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier.

Steps to appoint Appoint Additional Director-

1. Pass Board Resolution in Board Meeting to appoint additional director

2. Take Consent letter in Form DIR 2

3. Take MBP 1 & DIR 8 for interest in other entities

4. To attach as optional attachment in self attested aadhar card and pan card

5. File DIR 12.

Provided that the company shall, within thirty days of the appointment of a director, file consent (DIR 2 )with the Registrar in Form DIR-12 along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.

Appointment of Key Managerial Personnel(As per section 196, 203 & Chapter XIII The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ]

What is Key Managerial Personnel

As per section 2(50)”key managerial personnel”, in relation to a company, means—

(i) the Chief Executive Officer or the managing director or the manager;

(ii) the company secretary;

(iii) the whole-time director;

(iv) the Chief Financial Officer

As per section 203 and Rule 8 of Chapter XIII The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Every listed company and every other public company having a paid-up share capital of ten crore rupees or more shall have whole-time key managerial personnel.So it can be concluded that private company is not required to appoint Key Managerial Personnel.

But there is exception to this that as per rule 8A of Chapter XIII The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Every private company which has a paid up share capital of ten crore rupees or more shall have a whole -time company secretary

Procedure to appoint Key Managerial Personnel

1 Pass Board Resolution containing the terms and conditions of the appointment including the remuneration.

2. Obtain MBP-1 & DIR 8

3. File DIR 12

4. Pass Special Resolution (in case of appointment of a managing director, whole-time director or manager)

5.File MGT-14

6.File MR 1 (in case of public company only)

Important Point to note

1. A whole-time key managerial personnel shall not hold office in more than one company except in its subsidiary company at the same time:

2. 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.

3. No company shall appoint or employ at the same time a managing director and a manager.

4. No company shall appoint or re-appoint any person as its managing director, whole-time director or manager for a term exceeding five years at a time