# Personnel of a Company — Directors, Managers, KMP & Officers
This cluster of definitions identifies who the law holds accountable.
## 1. Board of Directors [Sec 2(10)]
> The collective body of the directors of the company.
## 2. Director [Sec 2(34)]
> A director appointed to the Board of a company.
Not every senior executive is a 'director' — only those formally appointed.
## 3. Manager [Sec 2(53)]
An individual who:
subject to superintendence, control and direction of the Board,
has the management of the whole, or substantially the whole, of the affairs of a company; and
includes a director or any other person occupying the position of a manager — by whatever name called, whether under a contract of service or not.
## 4. Managing Director [Sec 2(54)]
A director who:
by virtue of Articles, agreement with company, GM resolution, or Board resolution,
is entrusted with substantial powers of management, AND
includes a director occupying the position of MD by whatever name called.
### Carve-out: 'Substantial powers' do NOT include routine administrative acts authorised by Board, viz.:
Affixing the common seal
Drawing/endorsing cheques
Drawing/endorsing negotiable instruments
Signing share certificates
Directing registration of transfers
## 5. Chief Executive Officer (CEO) [Sec 2(18)]
An officer of a company who has been designated as such by the company.
## 6. Chief Financial Officer (CFO) [Sec 2(19)]
A person appointed as the CFO of a company.
## 7. Key Managerial Personnel (KMP) [Sec 2(51)]
Means:
1. CEO or MD or Manager;
2. Company Secretary;
3. Whole-time Director;
4. CFO;
5. Such other officer, not more than one level below the directors, in whole-time employment, designated as KMP by the Board; and
6. Such other officer as may be prescribed.
## 8. Officer [Sec 2(59)]
Includes:
any director, manager or KMP, OR
any person in accordance with whose directions/instructions the Board (or one or more directors) is/are accustomed to act.
## 9. Officer who is in Default [Sec 2(60)]
For any provision making an officer 'in default' liable to imprisonment / fine / penalty — means any of the following:
#
Category
(i)
Whole-time Director
(ii)
KMP
(iii)
Where no KMP exists — director(s) specified by Board (with their written consent) OR ALL directors if none specified
(iv)
Any person under immediate authority of Board/KMP charged with maintenance/filing/distribution of accounts or records — who authorises, actively participates, knowingly permits, or knowingly fails to prevent any default
(v)
A shadow director — person on whose advice/directions/instructions the Board is accustomed to act (excludes professionals)
(vi)
Every director aware of contravention via Board proceedings without objecting, OR with whose consent or connivance the contravention took place
(vii)
For share issue / transfer matters: the share transfer agents, registrars, merchant bankers to the issue/transfer
Worked example
### Example 1
Q: Mr. M is the GM (Operations) of S Ltd, reporting to the MD. The Board has not designated him KMP. Is he KMP under Sec 2(51)?
A: No. To be KMP under clause (v), the Board must designate him, he must be one level below directors AND be in whole-time employment. Designation by Board is essential.
### Example 2
Q: A statutory default occurs in S Ltd. S has no KMP. The Board has not specified any director under Sec 2(60)(iii). Who are 'officers in default'?
A:All directors become 'officers in default' under clause (iii) since no specification was made.
### Example 3
Q: Mr. K, a professional consultant, advises the Board occasionally. Is he an 'officer in default' under clause (v) of Sec 2(60)?
A: No. The clause expressly excludes persons giving advice in a professional capacity.
⚠️ Common exam mistakes
Treating every senior employee (e.g., COO) as KMP — only those listed or specifically designated qualify.
Forgetting that for MD under Sec 2(54), the person must already be a 'director'.
Saying routine acts like signing cheques amount to 'substantial powers of management' — the explanation excludes them.
Including professional advisors as 'officers in default' under shadow-director clause — they are excluded.
Missing that all directors become 'officers in default' when no KMP exists and no specification is made by Board.
Bare-Act text Section 2(10), 2(18), 2(19), 2(34), 2(51), 2(53), 2(54), 2(59), 2(60) · Companies Act, 2013 · click to expand
Sec 2(10): 'Board of Directors' or 'Board' means the collective body of the directors of the company.
Sec 2(34): 'Director' means a director appointed to the Board of a company.
Sec 2(53): 'Manager' means 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, and includes a director or any other person occupying the position of a manager, by whatever name called, whether under a contract of service or not.
Sec 2(54): 'Managing director' means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called. Explanation. — administrative acts of a routine nature when so authorised by the Board shall not be deemed to be included within the substantial powers of management.
Sec 2(18): 'Chief Executive Officer' means an officer of a company, who has been designated as such by it.
Sec 2(19): 'Chief Financial Officer' means a person appointed as the Chief Financial Officer of a company.
Sec 2(51): 'Key managerial personnel' 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; (v) such other officer, not more than one level below the directors who is in whole-time employment, designated as KMP by the Board; and (vi) such other officer as may be prescribed.
Sec 2(59): 'Officer' includes any director, manager or key managerial personnel or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the directors is or are accustomed to act.
Sec 2(60): 'Officer who is in default' means — (i) whole-time director; (ii) key managerial personnel; (iii) where there is no KMP, such director(s) as specified by the Board in this behalf or all directors if no director is so specified; (iv) any person under the immediate authority of the Board/KMP charged with responsibility for maintenance, filing or distribution of accounts or records, who authorises, actively participates, knowingly permits or knowingly fails to take steps to prevent any default; (v) any person in accordance with whose advice, directions or instructions the Board is accustomed to act, other than a person who gives advice in a professional capacity; (vi) every director aware of contravention by receipt of proceedings of the Board or participation without objecting, or where contravention took place with his consent or connivance; (vii) in respect of share issue or transfer — share transfer agents, registrars and merchant bankers.