Summary: Section 152(6) of the Companies Act governs the retirement of directors by rotation in public companies, with private companies excluded from this provision. According to the section, unless otherwise specified in the Articles of Association, two-thirds of the total number of directors (excluding independent and nominee directors) must be those liable to retire by rotation. From this group, one-third must retire at every Annual General Meeting (AGM). In rounding calculations, two-thirds are rounded up to the next whole number, while one-third retiring directors are rounded to the nearest whole number. Directors who retire are eligible for reappointment through a majority vote. Independent and nominee directors are excluded from the rotation count, while small shareholder directors, although included in the two-thirds, are non-rotational and not subject to retirement by rotation. The order of retirement follows the First-In-First-Out (FIFO) method, meaning those who have served the longest retire first. If multiple directors were appointed on the same date, retirement is decided by a draw of lots. For instance, in a public company with 12 directors, including 6 independent directors, only the remaining 6 are considered for rotation. Two-thirds of these (i.e., 4 directors) are liable to retire by rotation. At each AGM, one-third of these four—rounded to 2—must retire. After reappointment or retirement, the cycle continues based on tenure, maintaining an orderly rotation.Read more at: https://taxguru.in/company-law/director-retirement-rotation-section-152-6-detailed-overview.html#google_vignetteCopyright © Taxguru.in
reappointment through a majority vote. Independent and nominee directors are excluded from the rotation count, while small shareholder directors, although included in the two-thirds, are non-rotational and not subject to retirement by rotation. The order of retirement follows the First-In-First-Out (FIFO) method, meaning those who have served the longest retire first. If multiple directors were appointed on the same date, retirement is decided by a draw of
