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This is to clarify that under the companies act 2013 the company is regulated by the Board of a company. The Board decides as to how the directors are to be appointed, provided remuneration, or removed from their posts. But this also requires necessary approval from members in the general meetings. Although, the Board exercises almost all management powers but it is subject to the approval from Members in the General meetings or Authorization in the Articles of Association of the Company. The power which is not authorized by the deed of articles may require Member's approval or it may require alteration in the articles of association of the company. The company's management is generally based on the formation of the board of directors. Board is collectively responsible for the management of the company. After the responsibility of the board, the responsibility is given to the Officers, Directors, Manager, Managing Director, CEO, CFO, CS, or any other person as may be called.

The widest term in its scope and applicability among all the terms of management personnel is 'Officer'. Any individual who is appointed to the board by a member's resolution in the general meeting can be termed as Officer of a company.

It is always true that a person being appointed to the board is generally recommended by the board for appointment as such in the GM of the company.

Different Management Terms under the Companies Act - Explained

Section 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.

The most common term is director, generally, the provisions of companies Act portrays a scene while levying a penalty for non-compliance of any provision as “Every Director, Officer who is in charge...'.The reason why these terms are used to levy a penalty is the two words will be going to include every kind of management personnel.

However the term director is also very common for all kinds of persons who are appointed to the board of a company like a Non-executive director is also a director, a woman appointed to the board will also be included, an Engineer or an expert otherwise if appointed to the board will also be regarded as a director because he is going to participate in the management of the company.


Section 2(34) director means a director appointed to the Board of a company.

Under the companies act director himself is not authorised to perform all acts of management rather the board is ultimate management authority. The powers which are required to be exercised by the board in a board meeting, cannot be exercised by the director alone.

Section 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.

The term manager is related to the management of routine affairs of the company. It is the manager who is entrusted with the daily management affairs of the company. However, the board always oversees the work performed by Manager thereunder. It means the manager is not the ultimate holder of management rights and duties, the board always decides in the board meetings the scope of work for manager year after year.

The term KMP in the companies act is used to refer to the persons who are highly qualified, well equipped, trained and responsible for core management principles & policies and who are the final discretionary authorities within the management of the company.

Companies Act used the term KMP to include all these authorities in one word. For Example, Where the companies act refers to the Independent Director (Section 149(6)(e)) is the person who neither himself nor any of his relatives hold the position of a KMP. In these wordings, the lawmaker has made all core management authorities ineligible for being an Independent director.

Section 2(51) key managerial personnel, in relation to a company, 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; and

(v) such other officer as may be prescribed;

Section 2(18) Chief Executive Officer' means an officer of a company, who has been designated as such by it.

Sometimes the board decides not to keep a manager for management of routine affairs, rather the board selects one of its director as a manager, this person is termed as managing director.

There cannot be a Manager and a Managing Director both at the same time. The company can appoint either a manager or a managing director.


Section 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.

Section 2(24) Company secretary means secretary as defined u/s 2(1) of Company secretaries Act 1980 who is appointed by a company to perform the functions of a CS.

Section 2(94) whole-time director includes a director in the whole-time employment of the company.

There can be a whole time Director with a manager or managing director in the management of the company.

Section 2(19) Chief Financial Officer means a person appointed as the Chief Financial Officer of a company.

CEO means an officer who is designated as such. And same with CFO, an Officer who is designated as such.

In other words, the companies Act does not define the powers and duties of a CEO or a CFO, rather it says there can be an officer in the management of the company who is designated as such by the board of the company.

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Category Corporate Law, Other Articles by - Mohd Zain