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No company can, appoint or employ any individual as its managing director for a term exceeding five years at a time.

However, a person may be re-appointed, re-employed, or his term of office extended by further periods not exceeding five years on each occasion. Such re-appointment, re-employment or extension cannot be sanctioned earlier than two years from the date on which it is to come into force.

This provision does not apply to a private company unless it is a subsidiary of a public company.

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