Section 203. Appointment of key managerial personnel
(1) Every company belonging to such class or classes of companies as may be prescribed 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.
An individual shall not be appointed or re-appointed as chairperson of the company as well as managing director or Chief Executive Officer at the same time unless the articles provide otherwise or the company does not carry multiple businesses, subject to the statutory exception for prescribed companies having separate Chief Executive Officers for each business.
(2) Every whole-time key managerial personnel shall be appointed by a Board resolution containing the terms and conditions of appointment including remuneration.
(3) A whole-time key managerial personnel shall not hold office in more than one company except in its subsidiary company at the same time, subject to the statutory permission for appointment as a director with the permission of the Board.
(4) If the office of any whole-time key managerial personnel is vacated, the resulting vacancy shall be filled by the Board at a meeting within six months from the date of vacancy.
(5) If a company makes default in complying with this section, the company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel in default shall be liable to a penalty of fifty thousand rupees, with the prescribed additional penalty for continuing default, subject to the statutory maximum.
