The appointment of directors in a company is governed by the Companies Act, 2013 (the Act). The Act provides that the directors of a company are appointed by the company’s shareholders in a general meeting.
Proportion of directors to retire by rotation
The Act also provides that at least two-thirds of the total number of directors of a public company must retire by rotation at every annual general meeting of the company. This means that one-third of the directors can be appointed by the shareholders every year.
Multiple choice questions (MCQs) on the appointment of directors and the proportion of those who are to retire by rotation in a company
- Which of the following companies is not required to have its directors retire by rotation?
- A public company
- A private company
- A One Person Company (OPC)
- A small company
- The answer is (c). An OPC is not required to have its directors retire by rotation.
- A public company has 12 directors. How many directors are required to retire by rotation at the next annual general meeting?
- 4
- 6
- 8
- 10
- The answer is (b). At least two-thirds of the total number of directors, which is 8, are required to retire by rotation at the next annual general meeting.
- A public company has 10 directors. The articles of association of the company state that all of the directors are required to retire by rotation at the next annual general meeting. Are the articles of association valid?
- Yes
- No
- It depends on the decision of the shareholders
- It depends on the decision of the board of directors
- The answer is (b). The articles of association are not valid. The Act only allows for at least two-thirds of the directors to retire by rotation.
Answers
- (c)
- (b)
- (b)