How far in advance of the expiry of a managing director's or whole-time director's term may the company first make the reappointment under Section 196(2)?
Question and options
How far in advance of the expiry of a managing director's or whole-time director's term may the company first make the reappointment under Section 196(2)?
12 months before expiry
6 months before expiry
3 months before expiry
9 months before expiry
Answer and explanation
The proviso to section 196(2) of the Companies Act, 2013 bars any re-appointment of a managing director, whole-time director or manager earlier than one year before the expiry of the current term. Re-appointment three, six or nine months ahead is therefore allowed, but not earlier than twelve months.
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