Board Resolution for appointment of Chief Financial Officer CFO

The appointment of Chief Financial Officer (CFO) in a company as a whole-time key managerial personnel is done in accordance with section 203 of the Companies Act, 2013 (India).

A Chief Financial Officer (CFO) of a company is mainly responsible for looking after the overall finance of the company which includes accounting, record keeping, reporting to govt authority, financial planning, treasurer, handling financial risks, advising the board of directors in the matters of finance, etc.

The appointment of a CFO shall be done by means of a resolution of the Board containing the terms and conditions of the appointment including the remuneration.

You may refer the following template of board resolution for this purpose.

SAMPLE #1

“RESOLVED THAT pursuant to the provisions of section 203 of the Companies Act, 2013 and rules made thereunder, and any other applicable provisions, including any amendments thereto for the time being in force, (Name of the Person) be and is hereby appointed as the "Chief Financial Officer (CFO)" of the company with effect from (date) on the terms and conditions including the remuneration as per the draft letter of appointment tabled before the Board, initialed by the Chairman for the purpose of identification.

FURTHER RESOLVED THAT the (Name of the Director / Officer), (Designation) of the company be and is hereby authorized to file the applicable e-form(s) and document(s) with the Registrar of Companies, ............. and to do all such acts, deeds and things as may be necessary or incidental in this regard.”

..................................................

SAMPLE #2

“RESOLVED THAT pursuant to the provisions of section 203 of the Companies Act, 2013 read with relevant rules made thereunder, and any other applicable provisions thereof, including any amendments thereto for the time being in force, (Name of the Person) be and is hereby appointed as the "Chief Financial Officer (CFO)" of the company with effect from (date) on the following remuneration subject to deduction at source of all applicable taxes in accordance with the laws for the time being in force:

A) Basic Salary: INR .............. per month upto a maximum of INR .............. per month, with the authority to the Managing Director to fix his/her salary within the said maximum amount from time to time.

B) Benefits, Perquisites, Allowances: In addition to the Basic Salary referred to in (A) above, the CFO shall be entitled to:

 a) Rent-free residential accommodation (furnished or otherwise), the Company bearing the cost of repairs, maintenance, society charges and utilities (e.g. gas, electricity and water charges) for the said accommodation.

 OR

House Rent, House Maintenance and Utility Allowances aggregating 85% of the basic salary (in case residential accommodation is not provided by the Company).

 b) Hospitalisation, Transport, Telecommunication and other facilities:

   i) Hospitalisation and major medical expenses for self, spouse and dependent (minor) children;

   ii) Car, with driver provided, maintained by the Company for official and personal use. If this is not availed, Mr./Ms. ............. ................ will be paid a monthly allowance of INR ................ per month to cover the cost of the vehicle, fuel, maintenance and driver. This amount will be fully taxable in his hands.

   iii) Telecommunication facilities including broadband, internet and mobile.

   iv) Housing Loan as per the Rules of the Company.

 c) Other perquisites and allowances given below subject to a maximum of 50% of the basic salary, comprising the following:

 (i) Allowances 30% (ii) Leave Travel Concession/Allowance 7.5% (iii) Medical allowance 7.5% [Total (i) + (ii) + (iii) = 45%]

 (iv) Personal Accident Insurance at actuals (v) Club Membership fees of 2 clubs [(iv) and (v) together to a cap of 5%]

 d) Contribution to Provident Fund, Superannuation Fund or Annuity Fund and Gratuity Fund as per the Rules of the Company. In case there is no contribution to the Superannuation Fund, the same would be payable as an allowance as per the Rules of the Company.

 e) The CFO shall be entitled to leave in accordance with the Rules of the Company. Annual Leave earned but not availed by the CFO is encashable in accordance with the Rules of the Company.

C) Incentive Remuneration: Such incentive remuneration not exceeding 100% of basic salary to be paid annually at the discretion of the Managing Director in consultation with the Chairman, based on certain performance criteria and such other parameters as may be considered appropriate from time to time.

RESOLVED FURTHER THAT (Name of the Chairman / Managing Director / CEO) be and is hereby authorised to issue a letter of appointment to (Name of the Person), CFO, as per the draft letter of appointment tabled before the Board, initialed by the Chairman for the purpose of identification.

RESOLVED FURTHER THAT the (Name of the Director / Officer / Employee), (Designation) of the company be and is hereby authorized to file the applicable e-form(s) and document(s) with the Registrar of Companies, ............., make an entry in the Register of Directors and Key Managerial Personnel and their shareholding and to do all such acts, deeds and things as may be necessary or incidental in this regard.”