KMP and Company Secretary under the Companies Act

Key Managerial Personnel (KMP) are the senior people the Companies Act names as responsible for running a company. They include the CEO, managing director or manager, whole-time director, chief financial officer and company secretary, plus any officer the board designates as KMP.

Why it matters for business registrations

A small private company does not need a full KMP team on day one. The duty kicks in as the company grows or becomes public. Knowing this early helps you budget and avoid penalties, for example when moving towards a public limited company.

Who must appoint whole-time KMP

• Every listed company.
• Public companies above a prescribed paid-up capital threshold.
• Certain other companies above a prescribed threshold, including a requirement for a whole-time company secretary. Check the current rules for the exact limits.

Where it applies, the company needs a CEO or managing director (or a whole-time director or manager), a company secretary and a CFO. If a post falls vacant, the board must fill it within six months. Public companies that cross the threshold should look at our public company annual compliance support.

What a company secretary does

A company secretary (CS) is a qualified professional, a member of ICSI, who keeps the company on the right side of the law. Typical work includes board and general meetings, minutes, statutory registers, ROC filings and advising directors. Companies without a mandatory CS often hire one part time through secretarial retainership. Larger companies may also need a secretarial audit.

Common mistakes

• Waiting until a notice arrives before appointing a CS or CFO.
• Letting a KMP post stay vacant beyond six months.
• Not filing the appointment or resignation with the ROC.
• Appointing someone without checking the qualification the law requires for a CS.

Appointments and resignations are usually recorded by board resolution. Roles also differ from director vs shareholder positions, so keep them straight.

Related guides: Board Resolution, Director vs Shareholder, MCA and ROC

FAQs

Is a company secretary mandatory for every company?

No. It is mandatory for listed companies and for companies above prescribed capital thresholds. Smaller companies are not required to appoint one.

Is a director a KMP?

A whole-time director or managing director is. An ordinary director is not, unless designated.

How long to fill a vacant KMP post?

The board must fill it within six months of the vacancy.

Not sure if your company needs a CS yet? Talk to a Taxhint expert and we will check against current rules.