In which circumstances is the director to be retired?

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Q. In which circumstances is the director to be retired?

Gujarat GsebGujarat Board (GSEB) HSC Commerce Board 2022Subjective· 3mImportance★★★★★

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A director retires or vacates office by rotation, on tenure ending, on resignation, on removal, on disqualification/vacation of office, or on insolvency, unsound mind or death.

The circumstances in which a director has to retire or leave office include:

Retirement by rotation — in a public company, at every AGM one-third of the rotational directors retire by rotation (the longest in office go first); they may be re-appointed.
Completion of term — where a director is appointed for a fixed period (for example, an independent director for his stated tenure), he retires on its expiry.
Resignation — a director may resign by giving written notice, which takes effect as provided in the Act.
Removal by members — the members may remove a director before the end of his term by an ordinary resolution after giving him a reasonable opportunity of being heard. …

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Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2026Set MARCH1 markMCQ
$Q. How much can be paid as remuneration to all full time Managing Directors?$
(a) (A) 5% of sales
(b) (B) 5% of net profit
(c) (C) 5% of share capital
(d) (D) 5% of reserve
›Reveal solutionSolution
Remuneration payable to a full-time Managing Director is limited to 5% of the company's net profit — the correct option is (B).

Managerial remuneration under the Companies Act is fixed as a percentage of net profit, not of sales, share capital or reserves. For a company with adequate profits:

if there is one managing/whole-time director, the maximum remuneration is 5% of net profit;

if there is more than one, the overall limit is 10% of net profit; …
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CBSE 2025Set MARCH1 markMCQ
$Q. When the employee frequently commits indiscipline, which punishment does the business firm give, as the last resort?$
(a) (A) Promotion
(b) (B) Demotion
(c) (C) Completion of service
(d) (D) Transfer
›Reveal solutionSolution
The last-resort punishment for repeated indiscipline is ending (completing/terminating) the employee's service — option (C).

Disciplinary action follows an escalating ladder:

Oral or written warning.

Fine or withholding of increment.

Demotion (reduction in rank/pay) — a corrective step.

Transfer — moving the employee elsewhere.

Termination / completion (ending) of service — the most severe step, applied only when all lesser measures fail and indiscipline continues. …
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CBSE 2022Set MARCH1 mark
$Q. Why is an investigation committee appointed?$
›Reveal solutionSolution

An investigation committee is appointed to inquire into a specific matter/complaint and report the facts so a fair decision can be taken.

An organisation appoints an investigation (inquiry) committee when a particular issue needs to be examined carefully and impartially before any action is taken — for example, a serious complaint, a suspected irregularity or misconduct, an accident, or a dispute. The committee is entrusted with the task of gathering evidence, questioning the persons concerned, ascertaining the true facts free from bias, and then submitting a written report with its findings and recommendations. This helps management or the authority concerned to decide justly on the basis …

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Q.In which circumstances is the director to be retired?

Concept understanding — Legal Position, Powers, Duties, Removal and Remuneration of Directors

Q.In which circumstances is the director to be retired?

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