Key Managerial Personnel 2(51)
Many new concepts have been introduced by the Companies Act 2013; one of them is “Key Managerial Personnel”.
KMP are the persons who hold key positions in the companies and are responsible for taking all the important business decisions. They have to act prudently and in the best interest of the company and its stakeholders. KMP can be held liable for any default in the company. (They are included in the definition of officer in default)
In the old act, only Managing Director, Whole Time Director and the Manager have been recognized as the “Key Managerial Personnel (KMP)” of the company. But in the new act, the definition is much wider.
As per Sec 2(51) of the Companies Act 2013, “Key Managerial Personnel” in relation to company means-
- the Chief Executive Officer or the managing director or the manager;
- the company secretary;
- the whole-time director;
- the Chief Financial Officer; and
- such other officer as may be prescribed.
(Clause v of the above definition give the power to the legislature to include any other person in the term of KMP).
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