Additional directors are to be included in total number of directors or not. Are they liable to retire by rotation?
15 Replies
vaibhav m
(17 Points)
Replied 22 April 2017
additional Directors are not includes in Director
they are not liable to retire by rotation
they are not liable to retire by rotation
Sudhir Todkar
(CS Professional)
(1021 Points)
Replied 22 April 2017
Additional directors are included in total number of directorship as per section 165 of the companies act. However alternate directors are not included in total number of directorship.
Additional directors are will vacate his office on next AGM of the company. If AGM is not held, he is deemed to vacate office on the last day on which AGM should have been held.
Additional directors are will vacate his office on next AGM of the company. If AGM is not held, he is deemed to vacate office on the last day on which AGM should have been held.
Sudhir Todkar
(CS Professional)
(1021 Points)
Replied 22 April 2017
Additional directors are not included in total number of directorship as per section 165 of the companies act. However alternate directors are included in total number of directorship.
Additional directors are will vacate his office on next AGM of the company. If AGM is not held, he is deemed to vacate office on the last day on which AGM should have been held.
Additional directors are will vacate his office on next AGM of the company. If AGM is not held, he is deemed to vacate office on the last day on which AGM should have been held.
Ravi Kiran Vustela
(Knowledge Seeker)
(1353 Points)
Replied 22 April 2017
161(1) doesn't override 152(6).... while calculating limits under 152(6) u need to consider AD...however they are not required to retire... they will retire as per 161(1) on AGM date
Indira
(CA )
(1381 Points)
Replied 23 April 2017
I also came across the same answer in one of the famous corporate law books add posted by Ravi. Also a small shareholder can also be considered for total number of directors as per that book as section 161 doesn't override section 152(6). Is it correct? Thanks Indira
Sudhir Todkar
(CS Professional)
(1021 Points)
Replied 23 April 2017
Additional Directors are not liable to retire by rotation since he liable to retire at end of the AGM and hence not counted within the meaning of total number of directors for counting rotational directors.
Jatin Bajaj
(CS)
(2930 Points)
Replied 24 April 2017
aDDITIONAL dIRECTORS ARE INCLUDED IN THE TOTAL NO OF dIRECTORS. iF THE MINIMUM STREGNTH OF THE DIRECTORS FALL BELOW THE STATUTORY LIMIT, COMPANY MAY APPOINT ADDITIONAL DIRECTORS. SUCH ADDITIONAL DIRECTORS SHALL HOLD THE OFFICE TILL UPCOMING AGM . AT AGM EITHER SUCH DIRECTOR WOULD RESIGN OR REGULARIZE AT AGM.
AS PER SECTION 152(6)- ADITIONAL DIRECTORS ARE LIABLE TO RETIRE BY ROTATION, BUT AS PER THE PROVISIONS THE DIRECTORS WHO ARE LONGEST IN THE OFFICE AS DIRECTOR WILL HAVE TO VACCATE FIRST BUT ADDITIONAL DIRECTOR HOLDS THE OFFICE TILL UPCOMING AGM AS PER SECTION 161(1)
Sudhir Todkar
(CS Professional)
(1021 Points)
Replied 24 April 2017
ADDITIONAL DIRECTORS, INDEPENDENT DIRECTORS & SMALL SHARE HOLDER DIRECTORS ARE NOT TAKE IN ACCOUNT WILL COUNTING TOTAL NUMBER OF DIRECTORS (2/3 BY RETIRE BY ROTATION). REASON BEING THAT THEY APPOINT FOR TERMS AS THE CASE MAY BE AND
FOR ADDITIONAL DIRECTORS WILL VACATE HIS/HER OFFICE AT NEXT AGM IRRESPECTIVE OF WHETHER AGM HELD OR NOT.. LAST DATE OF AGM IS LAST WORKING DAY FOR ADDITIONAL DIRECTOR UNLESS HE / SHE DISQUALIFY UNDER 164..
FOR ADDITIONAL DIRECTORS WILL VACATE HIS/HER OFFICE AT NEXT AGM IRRESPECTIVE OF WHETHER AGM HELD OR NOT.. LAST DATE OF AGM IS LAST WORKING DAY FOR ADDITIONAL DIRECTOR UNLESS HE / SHE DISQUALIFY UNDER 164..
Indira
(CA )
(1381 Points)
Replied 24 April 2017
Sudhir even i had the same opinion but the book iam following for my CA final says otherwise that they have to be included in calculation of total number of directors for rotation.
Thats why i had this confusion.
Sudhir Todkar
(CS Professional)
(1021 Points)
Replied 24 April 2017
Hello Indira,
Logically if you see, additional Directors where included in total number of rotational directors or not any haugh they have to vacate at next AGM. But if you add additional Directors in total number of rotational i.e. 2/3rd then the count will increase.
For example if there are 12 Directors in a company out of which there are 2 are additional Directors. If you take 2/3*12= 8*1/3 are liable to retire 3 but if you ignore additional Directors then 2/3*10= 7*1/3 are liable to retire i.e 2 because of additional Directors 1 Director is liable to retire from board which he is not liable to retire. That's why we should not consider additional Directors in retire by rotation when AOA is silent of public company.
Thank you
Logically if you see, additional Directors where included in total number of rotational directors or not any haugh they have to vacate at next AGM. But if you add additional Directors in total number of rotational i.e. 2/3rd then the count will increase.
For example if there are 12 Directors in a company out of which there are 2 are additional Directors. If you take 2/3*12= 8*1/3 are liable to retire 3 but if you ignore additional Directors then 2/3*10= 7*1/3 are liable to retire i.e 2 because of additional Directors 1 Director is liable to retire from board which he is not liable to retire. That's why we should not consider additional Directors in retire by rotation when AOA is silent of public company.
Thank you
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