Skip to content

CMA Intermediate · Business Laws and Ethics · Directors - Role, Responsibilities, Qualification, Appointment, Removal, Remuneration and Powers

Under Section 196, for what maximum term can a company appoint or re-appoint a person as managing director, whole-time director or manager at a time?

The maximum term is five years at a time. Section 196(2) forbids appointing or re-appointing a managing director, whole-time director or manager for longer than five years in one go, and re-appointment cannot be made earlier than one year before the term expires.

  1. AThree years
  2. BFive yearsCorrect
  3. CSeven years
  4. DTen years

Explanation

Section 196(2) states that no appointment or re-appointment can be for a term exceeding five years at a time. Three years is not the statutory limit, and seven or ten years would exceed the ceiling.

Did you get it right without looking?

One question tells you little. A timed set on Directors - Role, Responsibilities, Qualification, Appointment, Removal, Remuneration and Powers shows your real accuracy, how long you take and where you lose marks.

Practise Directors - Role, Responsibilities, Qualification, Appointment, Removal, Remuneration and PowersFree diagnostic mock

More Directors - Role, Responsibilities, Qualification, Appointment, Removal, Remuneration and Powers questions