🔑👥 Deciphering Directors and Key Managerial Personnel (KMPs) under Indian Company Law: An Application of the 80/20 Rule 🔑👥 Hello, #LinkedInCommunity! Today, we’re shedding light on #Directors and #KeyManagerialPersonnel (KMPs) as defined under Indian #CompanyLaw. Here are the essential 20% of points that provide a comprehension of about 80% of this complex topic.
1️⃣ Directors – Role & Appointment 👥🎯:
Directors are pivotal to a company’s governance and policy-making. Their appointment is usually decided by the shareholders during AGMs. As per the Companies Act, 2013, a director should be a competent individual, not a minor, and should have a Director Identification Number (DIN).
2️⃣ Types of Directors ⚖️👥:
Under the Companies Act, there are several types of directors including executive, non-executive, independent, additional, alternate, and nominee directors. Each type has a specific role, responsibility, and appointment process.
3️⃣ Key Managerial Personnel (KMPs) 🏢🔑:
Defined under Section 203, KMPs of a company include the CEO or the MD, company secretary, whole-time director, CFO, and any other officer as may be prescribed.
4️⃣ Duties of Directors & KMPs 📋📈:
Both Directors and KMPs are responsible for the management of the company. Their fiduciary duties include acting in the best interest of the company, promoting its objects, and ensuring legal compliance.
5️⃣ Removal of Directors & KMPs 🚫👥:
Directors can be removed by passing an ordinary resolution as per Section 169. For KMPs, the process is typically outlined in the terms of their contract and governed by the company’s internal policies.
By comprehending these pivotal points, you’ll have a broad understanding of the role and regulations of Directors and KMPs under Indian Company Law. Feel free to share your thoughts or questions!
