BHAVESH DOSHI (CS) (42 Points)
04 August 2010Public Company having 5 directors (3 are MD/WTD and 2 are nominee director).
Articles of co specifically provides that MD/WTD shall be retire by rotation if required under applicable law.
As per Companies Act, whether MD / WTD can be consider as director retire by rotation?
Thanks & Regards,
BHAVESH
vivek
(CS)
(751 Points)
Replied 04 August 2010
Unless you have specifiaclly appointed any Director as non retiring, all the Directors of a Public Comp. will be retiring director irrespective his position as MD/WTD.
Regards,
Jagruti (CS)
(Service)
(1953 Points)
Replied 04 August 2010
Under Companies act even MD & WTD are liable to retire by rotation unless members so resolve for non retiring MD or WTD.
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 06 August 2010
First of all it is a very debated issue...
In my opinion, unless it is specifially provided in Articles of the company, The company has to comply section 255 and 256 which says that not less than 2/3rd directors are liable to retire by roration...
And in case, there is not any necessity MD and WTD should not be counted for section 255 and 256.
Becasue of the contract which specifically appoint them for a period of 3 years.....
Although, there is clarification that in case of retirement and reppointment under seciton 255, it would not considered as break of term. I would not prefer to retire MD or WTD....
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 06 August 2010
Further, when we appoint him for a fixed period of 3 years, it means that the term of director is not remain liable to be counted for retiere by rotation.
Mansi
(Article)
(61 Points)
Replied 17 August 2010
nidhigoel89
(Company Secretary )
(594 Points)
Replied 17 August 2010
As per my opinion a MD/WTD is not liable to retire by rotation because the term of office is already defined in his agreement. only after the expiry of his term of office he is liable to be retire and reappointed again if required.
Ajay Mishra
(Company Secretary)
(74337 Points)
Replied 17 August 2010
Dear Friend
Your Board of directors consisting of two MD and three WTD is wrong constitution and violate the provisions of Companies Act, 1956. A company can have only one MD but you can appoint more than one WTD. For a public company all directors of the board is non-rotational is against the Act. Please check your company’s Article and increase the strength of board by appointing rotational directors.
Others view will also be solicited.
Regards
Ajay Mishra
CAclubindia
