Director

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Abdu Rahim.c

Abdu Rahim.c (Querist)
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04 September 2013 How many director shall retire by rotation ..??? is it mandatory if article is silent ???

Ajay Mishra

Ajay Mishra (Expert)
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04 September 2013 Section 255 and 256 deal with Such Provision. Yes for public company it is mandatory.

Not less then two-third of the total directors shall be liable to retire by rotation:

In a public or a private company, which is a subsidiary of a public company, not less than two-thirds of the total number of directors shall be such whose period of office shall be subject to retirement by rotation.

The duration of office of remaining one-third of the total strength shall be as per the provisions in the Articles. In the absence of any such provision, the said remaining directors shall also be subject to retirement by rotation.

The directors in a private company, in case of default of any provision in the Articles, will also be appointed by the company in its general meeting.

Ajay Mishra

Ajay Mishra (Expert)
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04 September 2013 One-third of rotational directors shall retire annually:[Section 256]

In a public company or a private company which is a subsidiary of a public company, at every annual general meeting, one-third of the directors liable to retirement by rotation (namely one-third or two-thirds of the total directors and where there is no provision in the Articles, one-third of the remaining directors who are also subject to retirement) will retire but eligible for re-election.

Fraction if any, may be corrected to the nearest whole number for working out one-third. It is advisable to round off any fraction as one, irrespective of whether the fraction is half or less than half.

The directors to retire by rotation shall be those who have been longest in office. When some directors are appointed on the same day, then those who are to retire shall be subject to mutual agreement or shall be decided by way of lot.

Where public financial institutions give loans or other financial assistance to companies, agreements are entered into between them. In some cases the agreement may provide that the financial institution reserves the right to appoint their nominees as directors on the Board of companies.

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