Q.Explain the meaning of Key Managerial Personnel (KMP) and state which companies are required to appoint them under Section 203 of the Companies Act, 2013.

The Act names a specific short list of whole-time senior officers as KMP, and makes appointing them compulsory only for larger companies.

Meaning [Section 2(51)]: 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, not more than one level below the directors, in whole-time employment, designated as KMP by the Board, or as may otherwise be prescribed. These are the senior whole-time officers who actually execute the Board's policy decisions on a daily basis.

Companies required to appoint KMP [Section 203]: the requirement to appoint whole-time KMP is not universal — it applies only to:

• every listed company, and
• every other public company having a paid-up share capital of ₹10 crore or more.

Such companies must have, on a whole-time basis: (a) a Managing Director, or Chief Executive Officer, or Manager, and in their absence a Whole-time Director; (b) a Company Secretary; and (c) a Chief Financial Officer. Appointment is made by a resolution of the Board, specifying the terms and remuneration. …