1. R. Balasubramanian Practising Company Secretary Corporate Laws Week - ICAI

3.  KMP denotes the executive management of the Company.  They are the first point of contact between the Company and its stakeholders.  They are persons responsible for implementing the decisions of the Board.  The New Act has realised the need of recognising them.  Chapter XIII of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 deals with the said provisions. Corporate Laws Week - ICAI

4. Under Section 2(51) of the Act:  CEO or the Managing Director or the Manager;  Company Secretary  Whole Time Director  Chief Financial Officer  Such other officer as may be prescribed. The above definition is a modified version of definition of ‘Officers in default’ as per Companies Act, 1956 (Section 5) Corporate Laws Week - ICAI

5. Managing Director:  Defined under Section 2(54) of the Act.  A person who is entrusted with the substantial powers of the management of the Company and includes a Director occupying the position of Managing Director. Whole Time Director:  Defined under Section 2(94) of the Act.  A Director in the Whole-time employment of the Company. Corporate Laws Week - ICAI

6. Manager:  Defined under Section 2(53) of the Act.  An individual who, subject to the superintendence, control and direction of the Board of Directors, has the management of the whole, or substantially the whole, of the affairs of a Company. Corporate Laws Week - ICAI

7. CEO / CFO:  Defined under Section 2(18)(19) of the Act.  They are officers of the Company who has been designated such by it. Company Secretary:  Defined under Section 2(24) of the Act.  Means a Company Secretary as defined under the Company Secretaries Act, 1980. Corporate Laws Week - ICAI

8.  All Listed Companies  All Public Companies with paid up capital of Rs. 10 Crores or more shall have Whole Time KMP.  MD / CEO/Manager or in their absence, a WTD.  CS  CFO  All Companies (irrespective of Public or Private) with paid up capital of Rs. 5 Crores or more shall appoint a Whole Time Company Secretary. Corporate Laws Week - ICAI

9. For Appointment of MD / WTD / Manager: (applicable for all Companies, when they appoint)  None of the above officials can be appointed for a term exceeding 5 years at a time.  Appointment should be approved by the Board as well as the Shareholders.  Should be more than 21 years and less than 70 years old.  Should be a resident in India (Stay in India for a continuous period of not less than twelve months immediately preceding the date of his appointment). Corporate Laws Week - ICAI

10. Governed by Sections 196, 197 and Schedule V. Provisions dealing with remuneration in Section 196 (4) & (5) is not applicable for Private Companies w.e.f. 5 th June, 2015. Schedule V: 2 Parts Part 1: Eligibility (Applicable for all Companies) Part 2: Remuneration (Applicable only to Public Companies) Corporate Laws Week - ICAI

11. For Public Companies: If the Company is profitable:  Scenario 1 – 11% of Net Profits:  Overall remuneration (including Directors) not to exceed 11% of the net profits of the Company.  For each MD / WTD/ Manager – not in excess of 5% of the profits.  For all MD/WTD/Manager put together – not in excess of 10% of the profits.  Scenario 2 – More than 11% of Net Profits:  Shareholders Approval.  Central Government Approval subject to Schedule V. Corporate Laws Week - ICAI

12. For Public Companies: If the Company is not profitable:  Scenario 1 – As per Schedule V:  As per limits given in Schedule V.  Shareholders approval is also required.  Scenario 2 – More than limits in Schedule V:  Shareholders Approval.  Prior approval of Central Government. Corporate Laws Week - ICAI

13. Limits as per Schedule V for Companies having inadequate profits: Corporate Laws Week - ICAI Where the Effective Capital is Limit of Yearly Remuneration Negative or Less than Rs. 5 Crores Rs. 30 Lakhs Rs. 5 Crores and above but less than Rs. 100 Crores Rs. 42 Lakhs Rs. 100 Crores and above but less than Rs. 250 Crores Rs. 60 Lakhs Rs. 250 Crores and aboveRs. 60 Lakhs plus 0.01% of the effective capital in excess of Rs. 60 Crores. The above limits shall be doubled if shareholders pass a Special Resolution.

14. As per Schedule V: Effective capital computed as aggregate of:  Paid up capital (excluding application money)  Reserves and Surplus (excluding revaluation reserve)  Securities Premium  Long term debt and Deposits repayable after one year. As reduced by:  Investments  Accumulated Losses  Preliminary Expenses not written off. Corporate Laws Week - ICAI

15. Definition: Any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income-tax Act, 1961. (Section 2(78)).  Salary  Fees  Commission  Perquisites  Rent Free accommodation, Reimbursement of expenses, etc Corporate Laws Week - ICAI

16. As provided in Section 197:  Sitting fees of Directors (not exceeding Rs. 1 Lakh per Board Meeting).  Any services rendered in professional capacity, in the opinion of Nomination and Remuneration Committee or in their absence, in the opinion of the Board.  D & O Insurance premium will not form part of remuneration unless the Director is found guilty Corporate Laws Week - ICAI

17. As provided in Schedule V:  Contribution to PF, Superannuation Fund, Annuity Fund to the extent they are not taxable.  Gratuity payable at a rate exceeding half a month’s salary for each completed year of services.  Encashment of Leave.  Children Education Allowance: Upto Rs. 12,000/- per month per child to a max. of 2 children.  Holiday passage for children studying outside India or family staying abroad: Once in a year in Economy or Once in 2 years in First Class.  Leave Travel Concession: In accordance with the rules specified by the Company. Corporate Laws Week - ICAI

18.  No prescribed qualification for a CFO / CEO  No time period for appointment unlike MD / WTD / Manager  No limits on Remuneration.  To be appointed by means of Board Resolution.  Listed Companies should disclose in their Board’s Report among other things:  Comparison of the remuneration of (each of) the Key Managerial personnel against the performance of the company.  Detailed disclosures in Board’ Report as given in the Rules. Corporate Laws Week - ICAI

19. CFO:  Neither Role nor Eligibility nor Remuneration terms given in the Act.  Companies are free to frame their own rules for the same.  However, form filing is made mandatory when appointment is made.  CFO shall sign the financial statements, in addition to the Directors and Company Secretary as per Section 134(1). Corporate Laws Week - ICAI

20.  Section 205 read with Rule 10 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, specifies the duties and functions of CS.  Some important duties:  Facilitate Board / General / Committee meetings.  To represent before various authorities.  To assist the Board to conduct the affairs.  To ensure compliance of Secretarial Standards. Corporate Laws Week - ICAI

21.  A Whole Time KMP cannot hold office in more than one Company except its Subsidiary at the same time.  A Whole Time KMP holding office in more than one Company at the same time, shall within a period of six months, choose one Company in which he wishes to continue.  A Company can appoint a MD if he is already a MD / Manager of another Company subject to approval by all the Directors. Corporate Laws Week - ICAI

23.  Certification of correctness of any document by a practising professional before it is filed with Registrar.  It was introduced to avoid registration delays and eventually evolved to check the correctness of the documents.  It acts as a pre-emptive check to ensure that the particulars stated in the form are true and correct.  ROC would rely upon the certification and take the document on record. Corporate Laws Week - ICAI

24. Some important forms wherein pre- certification is mandatory except for Small and One Person Companies:  INC-22 – Change in Registered Office  CHG-1 – Creation / Modification of Charges  MGT-14 – Filing of Resolutions / Agreements  SH-7 – Increase in Share Capital  PAS-3 – Allotment of Shares  DIR-12 – Changes in Board / KMP  MR-1 – Return of Appointment of MD Corporate Laws Week - ICAI

25.  Preferably get a Letter of Engagement for unknown new Clients;  Maintain the copies of forms filed including the attachments, either physically or electronically.  Preferably affix the DSC of the Authorised signatory of the Company in your presence.  Ensure that the attachments are visible.  Check the originals before attesting the photocopies. Corporate Laws Week - ICAI

26. Penal provisions under sections 447, 448 and 449 of Companies Act, 2013 & MCA circular (Circular No. 10/2014 dated 07.05.2014).

27. Section 447 (Punishment for Fraud)  Imprisonment from 6 months to 10 years.  Fine upto 3 times the amount involved. Section 448 (Punishment for False Statement)  Punishable under Section 447. Section 449 (Punishment for False Evidence):  Imprisonment from 3 to 7 years with fine which may extend to Rs. 10 Lakhs. Corporate Laws Week - ICAI

28. As per MCA circular no. 10/2014  The Regional Director or the Registrar as the case may be, shall conduct a quick inquiry against the professionals who certified the form and signatory thereof including an officer in default.  The Regional Director will submit his report to the Ministry who shall refer the matter to the concerned professional Institute for initiating disciplinary proceedings.  The Ministry shall also debar the concerned professional from filing any document on the MCA portal in future. Corporate Laws Week - ICAI

29.  Some forms do not need the DSC of Professional, even though the attachment shall concern the professional. Eg: CRA-4.  Due to technical issues, in some cases, we can even modify the form without removing the Digital signatures of the signatories.  Some attachments do not require pre- certification as per the instruction kit but the Ministry insists on the same. Eg: DIR-3.  DSC of the signatories as well as the professionals are not in the custody of the concerned persons. Corporate Laws Week - ICAI

30. R. Balasubramanian Practising Company Secretary Ph: (0) 99411 80826 Email: csrb.co@gmail.com Corporate Laws Week - ICAI