Appointment of CEO in private limited Co

[atish shanbhag]

Dear all,

Our company wishes to designate unit incharge as CEO of the Company. There is no statutory requirement for appointment of KMP other than CS.

Please guide as to whether provisions of The Companies Act,2013 needs to be followed such as filing of DIR-12 & other requirements for  such voluntary appointment/designation as CEO  or simple board resolution to that effect should suffice.

CS Atish R Shanbhag,

Goa

8806847437

[VINEET SHARMA]

Attachments: 

Consent letter of CEO

Board Resolution 

Appointment letter 

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[atish shanbhag]

So you mean to say appointment needs to be done as per the act and there is no other option for a private limited company ?

Regards,

CS Atish R Shanbhag,

381/8 'Aghan'

Old-highway,St cruz,

Goa-403005

8806847437

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[VINEET SHARMA]

It depends purely on the company but I would suggest you to go as per statutory requirements to avoid any future issues.

Thanks

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[atish shanbhag]

Thank You.

CS Atish R Shanbhag,

381/8 'Aghan'

Old-highway,St cruz,

Goa-403005

8806847437

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[Mohan Ramaswami]

I feel that so long as the person is not going to be a KMP, and the Co does not need to hv a KMP as per Law, then pass a board resolution authorising the MD of the Co to take appropriate action to designate the individual and decide upon the terms and condition of employment and remuneration payable to him.

This Board resolution is only for internal purposes. And may be the board resolution can be given if required to the Inspector of Factories. PF & ESI authorities.

Views of others welcome. 

Regards, 

Mohan

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[Rajesh]

I agree with Mr. Mohan. Appointment of CEO in a private company, whose paid up capital is less 10 crores, no need to follow the companies act for the appointment.

It is a formal appointment. Intimation to Inspector of Factories is also not required.

Regards,

Rajesh R

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[Premnarayan Tripathi]

Dear Friends,

 

I’ve slightly different viewpoint.

 

On reading of provisions of Sec. 203 along with definition of KMP u/s 2(51) of the Act, it appears that;

 

1.     Certain classes of cos. are mandatorily required to appoint KMPs u/s 203.

2.     If a Company voluntarily appoints a person with the ‘designation’ as included u/s 2(51), he will be considered as KMP for all the purposes of the Act, including being considered as ‘an officer-in-default’. However, compliance of provisions of sec. 203 is not mandatory. (However, it ought to be followed)

3.     Further, sec. 203 uses the phrase ‘whole-time-KMP’ unlike the definition of KMP which uses only the phrase ‘KMP’ without any prefix as ‘whole-time’. Meaning thereby, a company which voluntarily appoints a KMP, may appoint such KMP on part-time basis.

 

If a Company employs/appoints any person as CFO/CEO/CS, even though not mandatory, he would be considered as a KMP.

 

Thanks & Regards,

 

Premnarayan Tripathi

PRT & Associates

Company Secretaries

606, 6^th Floor, Shivalik Square

Nr. Adani CNG Pump, 132 Ft. Ring Road

New Vadaj, Ahmedabad – 380013

M: 89800 26497

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