Unless the articles provide for the retirement of all directories at every annual general meeting not less than 2/3 rds of the total number of directors of a public company, or of a private company which is a subsidiary of a public company, shall be persons whose period of office is liable to determination by retirement of directors by rotation by the company in general meting. The remaining directors in case of any such company and the directors generally in case of a private company which is not a subsidiary of a public company shall also be appointed by the company in the general meeting.
At the first annual general meeting of a public company or a private company which is a subsidiary of a public company, held next after the date of the general meetings at which the first directors are appointed and at every subsequent annual general meeting, 1/3rd of such of the directors for the time being as are liable to retire by rotation or if their number is not 3 or multiple of 3 then, the number nearest to 1/3rd shall retire.
The directors to retire by rotation at every annual general meeting shall be those who have been longest in office since last appointment. As between persons who became directors on the same day as those who retire shall, in default of and subject to any agreement among themselves be determined by lot. A director who is to retire by rotation at an annual general meeting cannot continue in office after the last day on which the annual general meeting in each should have been held.
At the annual general meeting at which a director retires as aforesaid the company may fill up the vacancy by a appointing the retiring director or some other person thereto. The retiring director is therefore eligible for reappointment. If the place of retiring director is not so filed up, the retiring director shall be deemed to have been reappointed at the adjourned meetings unless:
1) at the meeting a resolution for the reappointment of such directors has been put to the meeting and lost
2) the retiring director has, by a notice in writing addressed to the company or its Board of Directors expressed his willingness to be so reappointed or
3) He is not qualified or is disqualified from appointment;
4) A resolution, whether special or ordinary is required for his appointment or reappointments
5) where a resolution for the appointment of two or more directors by a single resolution is passed
The above provisions shall not apply to a private company and also to a Government company in which the entire paid up capital is held by Central Government of any state government or governments or by the Central Government and any or more state government.
Not less than two thirds of the total number of directors of a public company or private company which is a subsidiary of a public company are liable to retirement by rotation as one third of the directors who are liable to retirement by rotation are required to retire at every annual general meeting including the first annual meeting. It is open to such a company to provide in its articles that all the directors are liable to retirement by rotation or even that all the directors shall retire at every annual general meeting.
Thus one of all the directors one third is permanent. Rest two thirds are liable to retirement by rotation out of the which one third are required to retire at every annual general meeting.
Source: Business Law.