Every professional have confusion regarding rotation of Directors I.e. Director Retire by Rotation so let’s make it simple: –

Applicable Section: – Section 152(6) of companies Act, 2013

Eligibility: This section is applicable on only

  • Public company and
  • Private limited Company which is subsidiary of a public Company (Deemed Public Company)

Retire by Rotation not applicable to certain cases: –

1) Independent Director

2) Nominee Director

3) Additional Director (Section 161 of CA Act,2013)

4) First Director (Subscribed by AOA)

5) Executive Director (MD & WTD)

6) Director appointed for casual vacancy till Next AGM

7) Special Director

8) Any director appointed by any Tribunal

9) Small Shareholder DirectorRetire by Rotation not applicable to certain casesImportant Notes

√ The directors to retire by rotation at every annual general meeting shall be those who have been longest in office since their last appointment, but as between persons who became directors on the same day, those who are to retire shall, in default of and subject to any  agreement among themselves, be determined by lot.

√ At an annual general meeting a director retiring by rotation is eligible for reappointment and may be re-appointed, but the company may appoint some other person in place of the retiring director.

Let’s discuss by examples as given below

Total No of Director Total No of Executive Director Total No of Non Rotational Director Total No of Rotational Director No. of retiring director Whether executive will retire
10 3 4 (10-4 x 2/3) = 4 4 x 1/3 =1 No
11 10 2 (11-2 x 2/3)= 6 6 x 1/3=2 No
8 4 2 (8-2 x 2/3) =4 4 x 1/3 =1 No
5 5 (5 x 2/3)=2 (2 x 1/3)=1 Yes – 1

A.C.S., L.L.B. (GEN), B.COM Email Id: [email protected]

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May 2021