Rotation of directors

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shubham (Querist)
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30 December 2014 Section 152(6) of the Companies Act, 2013 provides that unless the Articles of Association provide for retirement by rotation of all directors at every annual general meeting, at least two-thirds of the total number of directors of a public company shall be persons whose office is liable to retirement by rotation and sub-section (7) provides that one-third of such directors shall retire by rotation at each annual general meeting of the company after the first annual general meeting.

This provision is a bit confusing? 2/3rd of directors(excluding independent directors) are liable to retire or 1/3rd? Can someone explain it to me with an illustration?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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30 December 2014 1. at least 2/3rd of the total number of directors of a public company shall be persons whose office is liable to retirement by rotation

2. one-third of such directors shall retire by rotation at each annual general meeting of the company after the first annual general meeting

e.g suppose there are 12 directors, as per the provision of section 2/3rd will be liable to retire by rotation i.e 8

1/3rd of such director i.e 1/3 of 8 (2.6 rounded off to 3) will retire at each agm

shubham

shubham (Querist)
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30 December 2014 and what about the rest, i.e. 5 directors (8-3). will they not be liable for retirement in that year?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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30 December 2014 yes they are not liable to retire by rotation

shubham

shubham (Querist)
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30 December 2014 then can't i simply say 2/9th (1/3*2/3) of the directors are liable to retire by rotation(answer will be same).

i mean what is the essence of putting 2/3rd of director in section 152(6) and 1/3rd in section 152(7)

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