Who is KMP and Who is NOT

[Siddharam Billur]

MD, WTD,CS,CFO appointed in Private Co., or not covered in class of Companies, Can they be treated as KMP.

[ACS suresh chaudhary]

KMP defination given under section 2 of CA 2013

[Utkarsh Gaur]

If company paid up is 10 lac or more then they will be treated as KMP.

[Vineeta Kumari]

i think if a company is having paid up capital of rs 10 lac or more they have to appoint a person as KMP as per section 203 of companies act 2013 and definition of KMP is given under section 2(51) of companies Act 2013

On Sat, Jul 23, 2016 at 4:51 PM, Utkarsh Gaur <utkarsh.g...@gmail.com> wrote:

If company paid up is 10 lac or more then they will be treated as KMP.

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[Vineeta Kumari]

hello anybody is having idea regarding business plan software?????//

[Naveen Kumar]

Utkarsh and Vineeta it's not the Rs 10 lacs 

See the Rule 8 of comp. (appointment and Remu. of managerial person) rule  2014, every listed company and every public company having PUC Rs. 10 crore or more shall have the KMP and Rule 8A every company other than covered in rule 8 having PUC 5 crore or more shall have whole time CS...so pvt company not required to have KMP.....

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Regards

Naveen Kumar

[Vineeta Kumari]

sorry sorry sir 10 crores

 right 

[Utkarsh Gaur]

sorry sir i remembered 10 crores

Dear Sir / Mam,

Kindly find the attachment.

Thanks & Regards

Utkarsh Gaur

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[Siddharam Billur]

I know the meaning of KMP which is given u/s 2(51). For Private Company and Public Co., not covered in class co., is exempted to appoint KMP.

But my point is, in a Private Co.,/ Public Co., not covered under the class-  MD, WTD, CS and CFO  are appointed even though not required under the act. So please now clarify whether these MD, WTD,CS, CFO are treated as KMP or NOT.

I also quote my opinion:- 

By reading Section 2(51), Section 2(60), 2(76), 170(Rule 17 and 18 of Co., Appoin and Qualifi of Director),195, 196, 203,and  Exemption Notification  dated 05th June, 2015  and other many sections

Section 203 and Rule Co.,(Appoin and Remuneration of Managerial Personnel),2014- Rule-8 and Rule-8A ONLY mandates to appoint KMP.

So I Conclude that, In any Co., Persons covered under the definition of KMP are appointed, that Person shall be treated as KMP, IRRESPECTIVE of Private Co., or Public Co., covered under the Class.. 

Dear Professionals, Kindly inform me whether My point of view is correct or not, if not, please justify it.

On Saturday, July 23, 2016 at 8:37:39 AM UTC+5:30, Siddharam Billur wrote:

[AJAY NATH Sahay]

Dear Sir,

You are right !

CS.Ajay Sahay

[Vineeta Kumari]

hello sir

up to my awareness until we designate as KMP they dont fall in that category i think same is the case with CS also until we appoint him/her or rather designate as KMP they didnt fall under the definition.

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[Siddharam Billur]

Madam, my boss opinion and your opinion is same. but CS appointed under Rule 8A is treated as KMP.

On Saturday, July 23, 2016 at 8:37:39 AM UTC+5:30, Siddharam Billur wrote:

[Vineeta Kumari]

but sir please tell me that how can it be without designating him as such ?????

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[Nitin Dwivedi]

For Private Company he will be treated as Whole-time Company Secretary not Key Managerial Personnel.

Regards,

NITIN DWIVEDI

[Naveen Kumar]

Sidharam ji, For pvt. company it will be treated as whole time CS not d the KMP..

Regards

Naveen Kumar

[Siddharam Billur]

I will treat Co, having Paid up Cap of Rs. 5Cr is Class Co., 

On Saturday, July 23, 2016 at 8:37:39 AM UTC+5:30, Siddharam Billur wrote:

[Peer Mehboob]

Sec. 203, provisions for the appointment of KMP are applicable on classified companies but the definition of KMP under Sec. 2(51) is not applicable for only classified companies specified in Sec.203. Therefore, if any company not classified under Sec.203 for mandotarily making appointment of KMP, then also the WTD/CEO/CFO/CS/MD/Mgr. of such company will be considered as KMP as Sec.2(51) is applicable to all companies. In the definition of KMP of a company, KMP means CEO/CS/CFO/WTD/MD/Mgr. 

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[Siddharam Billur]

Many professionals are quoting different view on this issue. I even mailed to past chairman of Bengaluru chapter to clarify the issue.

On Saturday, July 23, 2016 at 8:37:39 AM UTC+5:30, Siddharam Billur wrote:

[AJAY NATH Sahay]

Hello Mam,

The Section 2(51) enumerates as to who are KMP and the moment you appoint any of them he/she becomes KMP irrespective of the fact whether there is or is not requirement.and whatever type of the company be. You just think section Section 2(60), 2(76), 170(Rule 17 and 18 of Co., Appoin and Qualifi of Director),195, 196, 203,and  Exemption Notification nothing separately has been said.For example in case of Private company if  there is a Managing Director he would be regarded Officer in default for his being KMP

CS Ajay Sahay 

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[Siddharam Billur]

Dear Professionals, lastly I would like to conclude that by reading many articles provided by the various professionals on the internet, the Person defined in the section 2(51) is KMP IRRESPECTIVE of Company is.

Thanks to all member of e-Parivar.

 
On Saturday, July 23, 2016 at 8:37:39 AM UTC+5:30, Siddharam Billur wrote:

[Vineeta Kumari]

yes i agree with you siddharam sir but please clarify one thing that how automatically a person falls under category of KMP until we designate him/her for the same and then why provision for appointment of KMP in case of co. having paid up capital of rs 10 crore of more is made.

I am confused please clarify the issue.

Thanks & Regards

Vineeta

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[Siddharam Billur]

Madam, you raised the solid question, know i have to rethink my conclusion.

Because, "Definition of Director- a director appointed to the Board", has to be understood very carefully. MD/WTD is a Director.

On Saturday, July 23, 2016 at 8:37:39 AM UTC+5:30, Siddharam Billur wrote:

[Peer Mehboob]

Ms. Vineeta, you dont need to designate some person as KMP. If such person covers in the definition of KMP then he or she will be KMP. Sec. 2(51) defines KMP and provides that KMP means CFO/MD/Mgr./WTD/CEO/CS.. If these people are appointed then they are KMPs of the company.  Furthermore, in signatory details of the company, no one is shown as KMP. Sec. 203 provides for appointment of KMP in classified company that means such companies have to appoint all those officers who are in the definition of KMP. They are not designated as KMP but are covered in the definition of KMP and will bear the duties of KMP. KMP is not the designation but the Key Mangerial personnel in the management of the company.

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[Siddharam Billur]

Madam Peer, plz clarify me section 170, 195, and other sections used the wording as like "Director or KMP"

As per definition 2(34) Director includes MD, WTD also.

So, can we read wherever quoted under various sections as "Director or KMP", Director means- MD/WTD? 

On Saturday, July 23, 2016 at 8:37:39 AM UTC+5:30, Siddharam Billur wrote:

[Vineeta Kumari]

I agree what u are saying Peer Mehboob but my doubt is that if M.D appointed will fall in KMP then why limit under companies act for appointment of KMP is made because as per your conclusion if any of one given under definition of KMP appointed they will be called as KMP.

Please clarify , I am in a confusing state of mind

Thanks & Regards

Vineeta

[Vineeta Kumari]

i complelety agree with you , siddharam sir.

[Peer Mehboob]

All Directors are not KMP. As defined in the definition of KMP, only those doirectors who are WTD or MD are KMPs. Apart from WTD and MD, other directors are not KMPs. 

Sec. 170 provides for register of directors and KMPs that means the registers will provide apart from the details of KMPs, all details of all the directors of the company. 

In Sec. 195 also, section provides for directors or KMP covering both which means all directors are not KMP otherwise Act rather provide only KMP if definition would have covered all directors in its definintion.. 

Sec.2(34) provides definition of Director means director in the board of the company which will include MD, WTD. 

We cannot read directors or KMP same.

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[Peer Mehboob]

Vineeta, the limit for appointment of KMP under Sec.203 for classified companies is for appointment of all personnel as defined in the definition of KMP in the company. That means all people covered in the definition of KMP i.e. CEO/MD/Manager, CS, WTD and CFO, all these will be appointed in those classified companies. Sec.203 does not provide for anyone KMP in the classified companies but all KMPs as defined in the Sec.2(51) will be appointed u/s 203.

[Siddharam Billur]

So Peer Madam, if in a Co., where there is 2 MD and 2 or more  WTD, would we treat in this case all are KMP

[Peer Mehboob]

Yes

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[Siddharam Billur]

As veenita madam is saying my boss also opine so..

[Vineeta Kumari]

Sir one of my seniors is also having the same opinion and u being senior than me please tell and clarify exactly what it is to be and how we need to interpret this?

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[Siddharam Billur]

Ms. Veenuta I m too in confusion.

[karan]

As per ROC’s views : In case a company secretary is appointed by a company having a paid up capital of Rs. 5 Crores or more, he is treated as Key Managerial Personnel as well as officer who is in default.

[Siddharam Billur]

of course, it is very clear. But ROC of Not  answered on the question about, MD/WTD/CFO/cs in case of NOT classed Co., say less than 5cr Cap

[Kiran Chougule]

Sir,

MD, WTD,,CFO appointed in Private Co. can not be treated as KMP as it is not mandatory to appoint KMP by Private Company. 

Plz find attached file for ur reference. 

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Regards,
Kiran Chougule

[Siddharam Billur]

Sir, ROC didnt said that NOT to be treated as KMP, It is said that NOT requirement of appointment.  His words are NOT clarity regarding Whom to consider KMP and Whom not.

[Peer Mehboob]

In case of appointment of KMP in Private Companies, E-Form MR-1 is not required to be filed but that does not mean those CEO/MD/Mgr, WTD, CS and CFO, if appointed in pvt company or unclassified companies, then they will not be considered as KMPs. Since they are covered in the definition of KMP, therefore, if they are appointed they will be treated as KMP irrespective of the type of company.

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