KMP

[AKASH BATRA]

Can CS become CFO in same company?

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[VIMAL SHARMA Compliance]

There must be separate person

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Thanks & Regards,

Vimal Sharma

Move out of your comfort zone, You can only grow, if you are willing to feel awkward and uncomfortable, when you try something New..

[AKASH BATRA]

but so many companies appointing same person as CFO and CS or MD and CEO or CFO & Director and all companies are very big 

[VIMAL SHARMA Compliance]

CFO cum CS is not allowed.

MD cum CEO is allowed. MD is equal to CEO

CFO can be director as well

CS can be director as well

[AKASH BATRA]

where is written not allowed ? a same person CEO and MD how? where it is written we can appoint same person

[VIMAL SHARMA Compliance]

There are 3 different person required to comply sec-203

1.MD/CEO/Manager

2. CFO

3.CS

One can not hold position of other.

We can not designate a MD as CFO or CFO as CS at the same time. CFO/ CS can be director at the same time.

[Akshit Soni]

Ya Vimal is true

Same person can not hold 3 different position, As Company require whole time appointment of 3 different (KMP) for 3 post. 

So, CS can not act as CFO.

Thanks & Regards,
CS Akshit Soni 
(B.Com,L.L.B.,C.S.)

(M)+91 9727264335
E- Mail- cs.ax...@gmail.com

Ahmedabad

 

 

[Sweety Rai]

Yes, Mr. Vimal is Right,

B'coz now Balance sheet of the Company must be sign by the CFO & CS , so the same person can't sign in Dul Capacity as CFO & CS

   Regards

  Sweety Rai

Divya Jyoti Industries limited

Company secretary & Compliance Officer 

[AKASH BATRA]

whether same person can be appointed

 Director as well as CFO or

 Director as well as CS 

 M.D as well as CEO

Pl see this

[VIMAL SHARMA Compliance]

whether same person can be appointed

 Director as well as CFO or- YES

 Director as well as CS  -YES if he is member of ICSI

 M.D as well as CEO - YES

[AKASH BATRA]

Can CS and CFO be the same person?

Palak G.ACS at Sew Infrastructure Ltd.

• Like 
• Comment (27) 
• Share 
• 3 months ago

Comments

 Lalit M. likes this

 27 comments Jump to most recent comment

• 

  Pankaj

  Pankaj K.

  Experiencing Companies Act, 2013

  As per the definition of KMP under CA, 2013- 
  
  “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; and 
  (v) such other officer as may be prescribed 
  
  You may note there is NO OR except in sub-cluase (i), so there should be one among CEO/MD/Manager but there should also be one representing as CS, one representing as WTD, one representing as CFO and such other officer as prescribed in rule. 
  
  As per Rule, there is no other designation what has been prescribed in Act. 
  
  Moreover, CFO, if not a member of the ICSI, can never be appointed as CS also but in reverse case we may have other views also. 
  
  Thanks.

• 

  Palak

  Palak G.

  ACS at Sew Infrastructure Ltd.

  Thanks Pankaj .....but no where in the Act it is mentioned that one person can not play dual role in the same Company....i agree Section 203 stipulates that Company should have one CS, one CFO but what's wrong if CS of the Company be appointed as a CFO also? 
  Moreover there is no qualification prescribed for CFO hence i guess any person can be designated as a CFO.

• 

  Palak

  Palak S.

  Asst. Company Secretary at Jyoti Limited

  Top Contributor

  Plain reading of the Section states that each should be different. 
  
  Others' views are solicited.

• 

  Shreyans

  Shreyans R.

  Senior Manager, Assurance Services at S. R. Batliboi & Co.

  Both the person can be same person. 
  
  The Act doesn't restrict it anywhere.

• 

  Abhinav

  Abhinav D.

  Assistant Company Secretary at Eastman Auto & Power Ltd "ADDO Battery"

  If both can be same, then at the time of signing of BS, two sign are required by the same person as CS and CFO.??

• 

  Palak

  Palak G.

  ACS at Sew Infrastructure Ltd.

  i have seen balance sheet of companies where same person has signed under two capacities.

• 

  Shreyans

  Shreyans R.

  Senior Manager, Assurance Services at S. R. Batliboi & Co.

  The important aspect that someone in Company should be designated as CFO and CS, who are responsible for finance and secretarial departments, who takes onus of financial statements via signing the same. 
  If one person can execute both the responsibilities than its not wrong. 
  Others views are invited.

• 

  Palak

  Palak G.

  ACS at Sew Infrastructure Ltd.

  exactly Shreyans......
  in common parlance person being in whole time employment can not serve other company at the same time....CS and CFO both are treated as whole time employees of the Company.
  Hence i am not seeing any violation if one person has been designated as CS and CFO of the same Company.
  i think this is the biggest loophole in Companies Act 2013.Moreover funny thing is that Companies Act, 2013 does not prescribe any qualification for CFO it means any person can be designated as CFO for the sake of complying the provisions of Section 203 of CA, 2013.

• 

  Shreyans

  Shreyans R.

  Senior Manager, Assurance Services at S. R. Batliboi & Co.

  Palak - The gap is to encourage those personnel, who have evolved as CFO of the Company over the period of time through experience.

• 

  Dr. Mahesh

  Dr. Mahesh T.

  Sr. Vice President (Finance & Commercial) at VARUN BEVERAGES LIMITED

  If we go as per the one person concept then I think all the three requirements of CEO, CFO and CS can be met thru one person having CS as basic qualification. In my opinion the intent of the law should not be like this ! Other comments are solicited !

• 

  Palak

  Palak G.

  ACS at Sew Infrastructure Ltd.

  agree Shreyans.... but now onwards personnel without experience will also enjoy the privileges of CFO...

• 

  Shreyans

  Shreyans R.

  Senior Manager, Assurance Services at S. R. Batliboi & Co.

  Palak - I believe person designated as CFO will have much higher responsibilities and no employer is going to increase salary of a person just because he is designated as CFO. 
  Hence, I see it as more responsibilities rather than benefits.

• 

  ACS VINIT

  ACS VINIT G.

  LOOKING FOR COMPANY SECRETARIAL AND COMPLIANCES JOB

  i agree with shreyans ravrani

• 

  Srivani

  Srivani P.

  Chartered Accountant

  In my view one person cannot act as Company Secretary and Chief Finance Officer in the same company. The reason behind is the independence while performing the duties and responsibilities as a Company Secretary and CFO. 
  As we know that CFO act as a Chief of Finance whose main role is the Accounts and Finance Controller. Whereas Company Secretary Files all statutory returns, Other compliance and regulatory requirements. For all these activities he use the various reports which are prepared by finance department headed by CFO. 
  
  So, if both the person will be the same then how the purpose and basic objective of both the roles can be achieved. 
  There will be lot of manipulations. There will be a failure of Internal Control System which will result in poor governance. 
  
  Hence, in my view, to ensure the segregation of duties as a measure of efficient and effective working of internal control systems and fulfillment of two different functions performed by CFO and CS, there should always be two different persons - one as CFO and another as CS.

• 

  Shreyans

  Shreyans R.

  Senior Manager, Assurance Services at S. R. Batliboi & Co.

  @ Srivani - It depends on size of the organisation, if it is medium size or small size entity, both functions can be discharged by same person. 
  Further, CFO and CS are always supported by other team members. 
  We cant answer this question rule based only. Cost benefit analysis has to be seen before appointing two different professionals.

• 

  baba kishore

  baba kishore M.

  Manager - Finance at IVRCL Ltd with expertise in Infra PPP Project/structured Funding & Business Valuations

  One way of good governance and compliance is always have a CFO and Company Secretary separately. CS acts as a support function for all the business and financial transactions compliance and hence the CS reporting to the CFO shall be the right perspective. In small organizations, it's better to appoint an independent CS for overall corporate compliance. This will ensure minimum slippages of compliance and ensure good governance as well.

• 

  Usha

  Usha D.

  Company Secretary at Devbhoomi Awas Limited (Group Company of Turner Morrison Limited)

  Can a director of the company (holding CS degree) can become CS also of the same company ?

• 

  Palak

  Palak G.

  ACS at Sew Infrastructure Ltd.

  yes usha he can become CS of the same Company.

• 

  Lalit

  Lalit M.

  Real Estate Division at Shapoorji Pallonji And Company Limited

  Hi Palak 
  
  I am afraid the answer is NO.

• 

  Shreyans

  Shreyans R.

  Senior Manager, Assurance Services at S. R. Batliboi & Co.

  We have seen instances of CFO and Finance Director being same person, but rarely seen CS and Director. 
  I think practically this wont work.

• 

  Lalit

  Lalit M.

  Real Estate Division at Shapoorji Pallonji And Company Limited

  Hi Shreyans 
  
  The erstwhile section 383A of the Companies Act, 1956 provides that where the Board of directors of any such company comprises only two directors, neither of them shall be the secretary of the company....... which implies that a Director can also be the Secretary of the Company provided the Board comprises of more than two directors.

• 

  Palak

  Palak S.

  Asst. Company Secretary at Jyoti Limited

  Top Contributor

  I agree with Mr. Sharma..

• 

  Shreyans

  Shreyans R.

  Senior Manager, Assurance Services at S. R. Batliboi & Co.

  I agree with Mr Sharma, director can be CS of the Company. Technically, its not wrong. 
  But practically, I have never seen such instances. 
  Others' view are invited as well

• 

  Palak

  Palak S.

  Asst. Company Secretary at Jyoti Limited

  Top Contributor

  Director can be CS. My view is based on Article 77 (ii) in Table F. 
  
  Pls correct me if wrong.

• 

  Bhuvanesh

  Bhuvanesh S.

  VP-Corporate Affairs & Company Secretary at HOV Services

  Section 203 is very simple and clear. As it state prescribe companies shall have "whole time key managerial personnel". The word used is "personnel" and not "position". So same person cannot play role of different persons. 
  
  Only carve out is Article 77(ii) where a person being a director in the company can be appointed in other capacity.

• 

  Kalidas

  Kalidas V.

  Corporate legal and Management Consulting Professional

  I agree with Mr. Sharma. Sec 203 of the Act says whole time KMP. sub section 3 says every KMP to hold office in one company except in its subsidiary. So the intention seems to be holding one position on whole time basis.

• 

  Gautam

  Gautam D.

  Consultant at Reliance ADA Group

  I agree that Sec. 203 must be read to mean that the specified companies have at least three managerial persons, a Managing Director or permitted alternatives such as CEO, etc., a CS and a CFO. If the same person holds more than one of these three positions, he would not be full time in any of the three positions. For example, one person who is both CS and CFO would be a part time CS and a part time CFO. Also, an interpretation which proceeds on the basis that the same person can hold more than one post would lead to the absurd possibility that the same person would be CEO, CFO and CS. 
  The proviso to Sec. 203(1) throws some light on this issue as it contemplates and permits the same person to be Chairman and Managing Director but only in a limited number of cases. Thus where the Act permits the same person to hold multiple positions than specific provision is made for the same. There is no provision which permits the same person to be both CFO and CS or to hold more than one of the three prescribed KMP positions.

[CS Ankit Misra]

CS and CFO can be same person. There must be 3 KMP designations and the same can be hold by same person. Most beautiful example is one of the biggest company in India named RSPL Ltd. which is owner of RED CHIEF, GHARI DETERGENT and Namaste India Milk products has appointed its CS as CFO.

Pls check page no. 984 of chartered secretary of this month.

On Wed, Jul 30, 2014 at 12:27 PM, Akshit Soni <cs.aks...@gmail.com> wrote:

--

regards,

ANKIT MISRA

COMPANY SECRETARY

REGENCY HOSPITAL LTD.

KANPUR

8009968692

 Please do not print this email unless absolutely necessary

[Rakhi Singh]

No a cs can not become CFO as in Sec 203 it clearly mention Whole time KMP -

1. MD/CEO/MANAGER  and in their absence a WTD

2. CS AND

3 CFO

AND is used between CS and CFO both should be different person.

On Wed, Jul 30, 2014 at 12:35 PM, Sweety Rai <raisw...@gmail.com> wrote:

--

Thanks & Regards,

 Rakhi Singh

Company Secretary

NKG Infrastructure Limited

CIN-U74899DL1989PLC038371

Tel-+91-11-23413731

Fax-+91-120-4537458

Mob# - +919990664838

[Rakhi Singh]

Mr. Aakash ,

IMany Companies are Doing this but

I read Sec 203 and it says Company Secretary AND CFO and and means what means there should be two different person.

Thanks & Regards,

[Manoj Singh Bisht]

the catch is "Key Managerial PERSONNEL"

[Rakhi Singh]

It is personal Understanding and interpretation of law, i found same personal should not appoint as a whole time KMP.

Thanks & Regards,

[KHUSBU KHEMKA]

Dear Friends

I have some queries relating to appointment of CFO.

1) A company has chartered accountants not practicing and accountants since long, if we appoint any one of them is it  violation?

2) If a company has director who is also executive directors in rest of 4 or 5 companies, can we appoint him as CFO.?

3) Is it important to form remuneration and nomination committee before appointment of cfo subject to the recommendation of which we have to take approval of board?

4) Is there any remuneration prescribed in the act which the company is liable to pay to them, any minimum or maximum remuneration?

Regards

ACS KHUSBU KHEMKA