Can an Managing Director or whole time director or Executive Director also be CFO and / or CS in a company?

Legal Access is of the considered opinion that the 3 designations i.e. CEO/MD/WTD & CS & CFO are distinctly separate positions in the company as the contemplation of law is to fix separate responsibilities with legal obligations on violations of law separately on them. There is not an iota of evidence of a legislative intent that a CEO/M.D can also be a CS/CFO. To be precise, there cannot be 3 in 1 or even 2 in 1 positions. It is 1,1,1 distinct. The contrary opinion is grossly erroneous. Article 77 of table F also makes it doubly apparent that  a Director can either be a CEO, A director / manager, a director / CS, a director / CFO. It is echoing what the corporate have been following by appointing director as financial director, director legal, director purchase etc. But one must understand the subtle issue that a director finance / Legal/ purchase etc would be legally treated as EXECUTIVE DIRECTORS of the company. I hope this clarification suffices. Kindly further note the discussion below:- (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; The word used is ‘means’. Meaning they are distinct categories. Had there been any other intention there was no need to use (i), (ii) … to describe the distinctly classified different categories. Under erstwhile 383A a CS was a statutory position and a separate genus. The new Act also has the same intention. They are all separate genus and not species of the same genus. The confusion may arise as Dr. Irani Committee in order to consolidate (mainly to reduce the number of sections) merged many sections and made ‘legal compounds’. CEO, MD or WTD can’t be also a CFO and/or CS else all the provisions of section 196, 197 read with SCH V providing for term of 5 years, age, qualifications like insolvency, imprisonment etc. (which are almost replica of Old Act) would be rendered nugatory. Let us assume an MD is also made a CS. Who will be the appointing authority? Directors? The matter will have to be referred to shareholders as there will be change in designation even if there will be no proposal to increase any salary. Increase of salary may even require invoking Central Government. Section 196 only refers, MD, WTD and Manager and not the other KMPs? Part III of SCH V mandates the following:- “The auditor or the Secretary of the company or where the company is not required to appoint a Secretary, a Secretary in whole-time practice shall certify that the requirement of this Schedule have been complied with and such certificate shall be incorporated in the return filed with the Registrar under sub-section (4) of section 196.” Can an MD-CS certify this? Kindly see the provisions of signing of Balance Sheets. As per section 134(1), Financial Statement is required to be signed by: - the chairperson of the company where he is authorised by the Board or by two directors out of which one shall be managing director; - the Chief Executive Officer, if he is a director in the company, - the Chief Financial Officer; and - the company secretary of the company, wherever they are appointed. If the intention of the legislature had been to appoint an MD – CS it would have provided much differently. Article 77 (ii) in Table F visualises that a director can be appointed as a CEO, manager, company secretary or CFO. It has not provided that an MD or WTD or CEO or a CFO can also become a Company Secretary.



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