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Querist : Anonymous (Querist)

22 April 2012 What does it mean by the word retirement by rotation specified in sec 255 ?

Ajay Mishra

Ajay Mishra (Expert)
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23 April 2012 Hi

Provisions relating to the retirement of directors by rotation:-

A company may include suitable provision in the Articles of Association in this regard as follows:—
1. Not less than two-thirds of the total number of directors shall (a) be persons whose period of office is liable to retirement by rotation and (b) save as otherwise expressly provided in the Act, be appointed by the company in general meeting.
2. At every annual general meeting, one-third of the directors for the time being as are liable to retire by rotation, or if their number is not three or a multiple of three, then the number nearest to one-third shall retire from office.
3. The directors to retire by rotation at every annual general meeting shall be those who have been longest in office since their last appointment, but as between persons who became directors on the same day, those who are to retire shall, in default of and subject to the agreement among themselves, be determined by lot.

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.

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Jiten Gupta

Jiten Gupta (Expert)
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23 April 2012 Retirement by Rotation means Certain Director/s of company are liable to retire after certain time i.e. on every AGM.

Section 255, 256 these are applicable on public limited company only..

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