Section 203 of the Companies Act, 2013 deals with the appointment of Key Managerial Personnel (KMP) in certain classes of companies. KMP typically includes the Managing Director (MD), Whole-time Director (WTD), Chief Executive Officer (CEO), Company Secretary (CS), and Chief Financial Officer (CFO). The provision primarily ensures that companies have responsible managerial personnel to oversee governance and compliance.

Legal Provision

Section 203(3) of the Companies Act, 2013 states that a whole-time key managerial personnel shall not hold office in more than one company at the same time, except in its subsidiary company. This means that a person appointed as a KMP in a holding company may also hold a position in its subsidiary company.

The provision further clarifies that a KMP of the holding company can be appointed as a director in the subsidiary company, provided that the Board of Directors approves such appointment. This exception recognizes the practical need for managerial coordination between a holding company and its subsidiaries.

Draft Board Resolution

“RESOLVED THAT pursuant to the provisions of section 152 and 161 of the Companies Act, 2013, and other applicable provisions of the Companies Act, 2013 and Rules framed thereunder, including any statutory modification(s), enactment(s) or re-enactment(s) thereof for the time being in force, and the Articles of Association of the Company, and subject to the passing of resolution and issuance of consent by the board of directors of ___________________, the holding company, _________________, be and is hereby appointed as an Additional Director on the board of the Company with effect from the date of allotment of Director Identification Number by Ministry of Corporate Affairs, DIN Cell and shall hold office till the conclusion of upcoming Annual General Meeting of the Company or the last date on which the Annual General Meeting should have been held, whichever is earlier.

RESOLVED FURTHER THAT any of the Director of the company be and is hereby severally authorised to do all such acts, deeds and things as may be deemed proper, necessary, or expedient, including filing of the requisite forms/e-forms with the Registrar of Companies or submission of documents with any other authority, for the purpose of giving effect to the aforesaid resolution and for matters connected therewith or incidental thereto.

RESOLVED FURTHER THAT a certified true copy of the aforesaid resolution be given to the appropriate authorities with a request to act thereupon by any of the Director of the Company.”