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Directors Retiring by Rotation

Kavitha (Project Executive) (26 Points)

01 February 2010

Can a pvt. ltd have some directors as permanent directors who need not retire by rotation, while some directors gets to retire by rotation? Please elaborate

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7 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114778 Points)
Replied 01 February 2010

Dear friend, there is no need to worry as provisions related to rotational retirement of dirctors are not applicable to a private company. So all the directors are permanent in case of a pvt. co. However if your pvt. co. is a subsi of pub co. then the above provisions are applicable.

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 02 February 2010

Yes, the provisions of section 255 relating to retire by rotation is applicable to only Public Companies and Private Companies which are subsidiary of Public Company. Thus, in case the company is Public or subsidiary of any public company then provision of section 255 will be applicable and in such case yes, the company may have some non rotational directors but atleast 2/3 directors must be rotational.

Mitali Agarwal (Company Secretary) (638 Points)
Replied 14 June 2010

I would like to know that can a public ltd. unlisted co. appoint any of its directors say one-third of total no. of directors as non-rotational by passing a oard resolution unanimously?

Ankur Garg (Company Secretary and Compliance Officer) (114778 Points)
Replied 14 June 2010

Dear Mitali,

As per section 255 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 be rotational directors. It means law allows the company to have one third non-rotational directors.

So there is actually no need to pass any formal board resolution to declare one-third directors as non-rotational directors.

Please tell me if I’m missing something.

Regards

Mitali Agarwal (Company Secretary) (638 Points)
Replied 14 June 2010

Thanks Ankur Sir for your reply.

But Sir the names of the non-rotational directors have also been specified.

Whether is it correct?

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Ankur Garg (Company Secretary and Compliance Officer) (114778 Points)
Replied 14 June 2010

Where to specified??? I haven't seen anything like that...except the concerned appointment resolution.

Puneet (CA Final Student) (109 Points)
Replied 17 August 2010

Dear Ankur,

Could you please tell me the exact procedure of Section 255 and 256. I am studying it for the first time and i am totally consfused between them...If you have any article on it then please share that with me.