Role Transition and Salary Arrangements for KMP

[Sudhir M]

Can a KPM of a holding company become a KPM in a subsidiary company? If yes, is it permissible for them to receive a salary from the subsidiary company instead of the holding company?

AI Summary

KMP from Holding Company Can Serve in Subsidiary, Receive Salary if Complying with Companies Act, 2013 Rules. A Key Managerial Personnel (KMP) from a holding company can also serve as a KMP in a subsidiary company and receive a salary from the subsidiary, subject to certain conditions. Both companies must comply with the Companies Act, 2013, and ensure there is no conflict of interest. Board resolutions are typically required for such appointments, and the Articles of Association must permit the salary arrangement. The salary must adhere to legal remuneration limits, and all payments should be disclosed in financial statements. Compliance with corporate governance and regulatory standards is essential to avoid conflicts and ensure transparency.