Section 255 and 256

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Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2012 Hello Members,

In case all the Directors of the Company are liable to retire by rotation then how many of them would retire every year.

Assuming there are 6 Directors in the Company.

Regards,

Jiten Gupta

Jiten Gupta (Expert)
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21 February 2012 As per Section 255, 2/3 person shall be those who are LIABLE to retire by rotation

AND

As per Section 256 1/3rd Shall actually retire from above numbers

if total 6 Directors then 4 Shall be liable and out of these 4, 1/3rd i.e. 1 will actually retire..!!!!

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Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2012 Thank you for your reply.

However in my case all the directors are liable to retire by rotation.

so should i consider 1/3 to retire at every AGM?

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Jiten Gupta

Jiten Gupta (Expert)
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21 February 2012 Section 255 says unless Unless the articles provide for the retirement of all directors at every annual general meeting, not less than two-thirds of the total number of directors of a public company, or of a private company which is a subsidiary of a public company, shall—

(a) be persons whose period of office is liable to determination by retirement of directors by rotation; and

(b) save as otherwise expressly provided in this Act, be appointed by the company in general meeting

Under Section 256: one-third of such of the directors for the time being as are liable to retire by rotation (Under Section 256), or if their number is not three or a multiple of three, then, the number nearest to one-third, shall retire from office.

Regards

Jiten Gupta

Jiten Gupta (Expert)
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Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2012 Articles are silent apropos same.

however agreement appointing directors specify that they are liable to retire by rotation.

my question is since all the directors are liable to retire to by rotation i should retire 1/3 of total no. or i have to calculate it in manner so given i.e 1/3 of 2/3 of total no.

Ajay Mishra

Ajay Mishra (Expert)
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21 February 2012 Hi

Whether your article permit for retirement of all director, if yes then do so otherwise two third of the total number of director will be liable to retire by rotation as per section 255.

Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2012 Article specifies that 1/3 of such Director who are liable to retire by rotation in accordance with section 255.

but agreement appointing directors specifies that they are liable to retire by rotation.

Composition is like:

1. MD
2. WTD
3. WTD
4. NED
5. ID
6. ID

pl suggest how it will work in this case?

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Ajay Mishra

Ajay Mishra (Expert)
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21 February 2012 Hi

In your case what is NED, but only NED and ID will be taken into account and one director will retire on coming AGM.

Regards

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