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Board Resolution: Key Managerial Personnel KMP Appointment

draft board resolution for appointment of key managerial personnelThe appointment of Key Managerial Personnel (KMP) is done in accordance with the provisions of section 203 of the Companies Act, 2013.

Certain classes of companies are required to appoint whole-time key managerial personnel viz. Managing Director (MD), Chief Executive Officer (CEO), Whole-time Director (WTD), Company Secretary (CS), Chief Financial Officer (CFO), etc. Refer Rule 8 and 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Every key managerial personnel of a company shall be appointed by means of a resolution of the Board containing the terms and conditions of the appointment including the remuneration.



SAMPLE #1

#. Appointment of Ms. / Mr. ................... as a Key Managerial Personnel (KMP) of the Company

“RESOLVED THAT pursuant to the provisions of Section 203 of the Companies Act, 2013 ('the Act') read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and any other applicable provisions of the Act and rules made thereunder, including any amendments thereto or re-enacted thereof for the time being in force, Ms. / Mr. ............................, be and is hereby appointed as the "....(Designation)...." of the company, as a Key Managerial Personnel (KMP), with effect from (Date) on the terms and conditions including the remuneration as per the draft letter of appointment tabled before the Board, initialed by the Chairman for the purpose of identification.

FURTHER RESOLVED THAT (Name of the Director / Officer), (Designation) of the Company, be and is hereby authorized to do all such acts, deeds and things as may be necessary or incidental to give effect to the foregoing resolution.”


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SAMPLE #2

#. To appoint Mr. / Ms. .................................. for the post of (designation) as a Key Managerial Personnel of the company

“RESOLVED THAT pursuant to the provisions of section 203 of the Companies Act, 2013 read with relevant rules made thereunder, and any other applicable provisions thereof, including any amendments thereto from time to time, (Name of the Person) be and is hereby appointed as the "(Designation)" of the company, as a Key Managerial Personnel (KMP), with effect from (date) on the following remuneration subject to deduction at source of all applicable taxes in accordance with the laws for the time being in force:

A) Basic Salary: INR .............. per month upto a maximum of INR .............. per month, with the authority to the Managing Director to fix his/her salary within the said maximum amount from time to time.

B) Benefits, Perquisites, Allowances: In addition to the Basic Salary referred to in (A) above, he/she shall also be entitled to:

 a) Rent-free residential accommodation (furnished or otherwise), the Company bearing the cost of repairs, maintenance, society charges and utilities (e.g. gas, electricity and water charges) for the said accommodation.

 OR
House Rent, House Maintenance and Utility Allowances aggregating 85% of the basic salary (in case residential accommodation is not provided by the Company).

 b) Hospitalisation, Transport, Telecommunication and other facilities:
   i) Hospitalisation and major medical expenses for self, spouse and dependent (minor) children;
   ii) Car, with driver provided, maintained by the Company for official and personal use. If this is not availed, Mr./Ms. ............. ................ will be paid a monthly allowance of INR ................ per month to cover the cost of the vehicle, fuel, maintenance and driver. This amount will be fully taxable in his hands.
   iii) Telecommunication facilities including broadband, internet and mobile.

 c) Other perquisites and allowances given below subject to a maximum of 40% of the basic salary, comprising of: (i) Allowances 20%; (ii) Leave Travel Concession/Allowance 7.5%; (iii) Medical allowance 7.5%;  (iv) Personal Accident Insurance at actuals; and (v) Club Membership fees [(iv) and (v) together to a cap of 5%].

 d) Contribution to Provident Fund, Superannuation Fund or Annuity Fund and Gratuity Fund as per the Rules of the Company. In case there is no contribution to the Superannuation Fund, the same would be payable as an allowance as per the Rules of the Company.

 e) He/She shall be entitled to leave in accordance with the Rules of the Company. Annual Leave earned but not availed by him/her is encashable in accordance with the Rules of the Company.

C) Incentive Remuneration: Such incentive remuneration not exceeding 100% of basic salary to be paid annually at the discretion of the Managing Director in consultation with the Chairman, based on certain performance criteria and such other parameters as may be considered appropriate from time to time.


RESOLVED FURTHER THAT (Name of the Chairman / Managing Director / CEO), (Designation) be and is hereby authorised to issue a letter of appointment to (Name of the KMP), (Designation), as per the draft letter of appointment tabled before the Board, initialed by the Chairman for the purpose of identification.

RESOLVED FURTHER THAT (Name of the Director / Officer / Employee), (Designation) of the Company, be and is hereby authorized to file the applicable e-form(s) and document(s) with the Registrar of Companies, ............., if necessary, make an entry in the Register of Directors and Key Managerial Personnel and their shareholding, as may be necessary, and to do all such acts, deeds and things as may be necessary or incidental in this regard.”



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Relevant Resolutions:

1) Board Resolution for Appointment of Chief Financial Officer (CFO) - click here

2) Board Resolution for Appointment of Company Secretary (CS) - click here

3) Ordinary Resolution for Appointment of CEO & Managing Director - click here

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NOTE: The resolution sample(s) here is only for reference, to help you with drafting. Do refer the exact provisions of the Act, relevant rules framed thereunder and any other applicable laws to be able to not to miss out anything important while drafting.

Comments

  1. Akash Bansal9/08/2019

    This was very helpful while drafting resolution.

    ReplyDelete

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