Happy Mobile Ltd. is engaged in the manufacturing of mobiles and accessories related to mobile. The Board of the company consists of nine directors i.e. Rakesh (Director), Shyam (Director), Mehul (Director), Jigisha (Dir

CS Executive · Company Law · PYQS · June 2022
Happy Mobile Ltd. is engaged in the manufacturing of mobiles and accessories related to mobile. The Board of the company consists of nine directors i.e. Rakesh (Director), Shyam (Director), Mehul (Director), Jigisha (Director), Komal (Director), Kavita (Director), Ashish (Independent Director), Gagandeep (Independent Director) and Anil (Small Shareholder's Director). Articles of Association of the company does not provide for retirement of all directors at every Annual General Meeting. Calculate the number of directors liable to retire at the Annual General Meeting to be held on 15th September, 2022.

Answer & Explanation:

Section 152(6) of the Companies Act, 2013-states that unless it is provided by the articles of the company, 2/3rd directors are liable to retire by rotation and 1/3rd are liable to retire at every general meeting after the meeting at which first directors are appointed. Directors who are liable to retire by rotation are known as rotational directors. Any fraction while calculating 2/3rd shall be rounded off to the one. Alternatively, it can be said that only 1/3rd of the total number of directors can be non- rotational directors. Here, total directors mean directors appointed by the company. 1/3rd of rotational directors shall retire at every General Meeting. The directors who have been longest in office since their last appointment are liable to retire by rotation at every Annual General Meeting. Small Shareholders' Director and Independent Directors are non-rotational directors. Applying above provisions, Ashish (Independent Director), Gagandeep (Independent Director) and Anil (Small Shareholders' Director) are non-rotational directors. Remaining six directors are liable to retire by rotation. 1/3rd of rotational directors are liable to retire at the forthcoming Annual General Meeting (i.e. 1/3rd of 6 = 2). Therefore, any two directors from Rakesh, Shyam, Mehul, Jigisha, Komal and Kavita will retire by rotation.

Topics: Appointment and Qualification of Directors

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