Classification of Rule 8 and Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules,2014.
Rule
8 Appointment of Key Managerial Personnel.-
Every
listed company and every other public
company having a paid-up share capital of ten crore rupees or
more shall have whole-time key managerial personnel.
Considering
Rule 8 the appointment of KMP would be done for all Public Companies and Listed
Companies having Paid Up share capital of Rs. 10 Crore. The word every other
consists of those Public Companies having paid up share capital of Rs. 10
Crore, which further means below mentioned companies are not required to
appoint any KMP:
a) A Private Company(Irrespective of its Capital Size).
b) A Public Company having Paid up Share Capital of Less than
10 crore.
Now Rule 8A
“8A.
Appointment of Company Secretaries in companies not covered under rule 8.—A
company other than a company covered under rule 8 which has a paid up share
capital of five crore rupees or more shall have a
whole-time
company secretary.”
a) Interpreting the substance of the rule - A
company other than a company covered under rule 8 = A Private Company(Irrespective of its Capital Size)
and A Public Company having Paid up Share Capital of Less than 10 crore.
b) Limit of the required appointment of Company Secretary under
the Rule 8A= Company having Paid Up share Capital of Rs. 5 Crore and above, Irrespective
of Company Type.
Conclusion:
The
Rule 8A has an overriding effect on the terms of Appointment of Company
Secretaries. The wordings of the Rule 8A are self-explanatory about the word A
Company – Thus, removing the Barrier of Classification of company
whether public or private. Therefore we can conclude that the Any Company
having paid up share capital of Rs. 5 Crore and above have to appoint a whole-time
company secretary and the same shall further be part of KMP for the companies
as defined in Rule 8 of Companies (Appointment and Remuneration of Managerial
Personnel) Amendment Rules, 2014.
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