1. General

The Law on Amendments to the Turkish Commercial Code and Certain Laws (“Law”) was published in the Official Gazette No. 32560 dated 29 May 2024. With this Law, certain amendments were made to the Turkish Commercial Code No. 6102 (“TCC”). The provisions of the Law regarding the TCC entered into force on the date of its publishment in the Official Gazette, and we would inform you of the relevant changes with this bulletin.

2. Amendments to the TCC

2.1. Amendment regarding the Term of Office of the Chairman and Vice Chairman of the Board of Directors

Before the amendment in the provision of Article 366 of the TCC, the duties of chairman and vice chairman of the board of directors of a joint stock company could be exercised for a period of 1 year. With the amendment in Article 366 of the TCC, it has been rendered possible to determine the duties of chairman and vice chairman of the board of directors concurrently with the term of office of the board. Accordingly, if the board of directors will be appointed for 3 years of period, the duties of chairman and vice chairman of the board can also be exercised during this period and the chairman and vice chairman of the board do not have to be elected every year.

2.2. Amendments to the Non-Delegable Duties and Powers of the Board of Directors

Article 375 of the TCC sets out the non-delegable duties and powers of the board of directors of a joint stock company. In paragraph d of the relevant provision, "appointment and dismissal of managers, persons with the same functions and those with signature authority" were considered among the non-delegable duties and powers of the board of directors. This paragraph was amended by the Law and "appointment and dismissal of managers and persons with the same functions, excluding branch managers", were included among the non-delegable duties and powers of the board of directors. Accordingly, the appointment and dismissal of branch managers are no longer among the non-delegable duties and powers of the board of directors. Likewise, the appointment and dismissal of those with signature authority are no longer be among the non-delegable duties and powers of the board of directors as well.

2.3. Amendment regarding the Board of Directors’ Meetings

Before the amendment, Article 392/7 of the TCC regarding the board of directors’ meetings was as follows:

“Each board member may request the chairman in writing to call the board of directors for a meeting.”

With the Law, an addition has been made to the above provision and a regulation has been introduced regarding the meeting procedure of the board of directors. According to the newly introduced provision, upon the request of any member of the board of directors to call the board to a meeting from the chairman, if the request is deemed appropriate, the call will be made by the chairman of the board of directors. Upon the written request of the majority of the board members for a meeting, the chairman of the board of directors is obliged to call the board of directors to a meeting to be held within thirty days at the latest as of the date on which the request is received. In cases where the board of directors is not called to a meeting or the chairman or vice chairman of the board of directors cannot be reached within this period, the call can be made directly by the majority of the board, who are the requestors.

In addition to the new provision above, it is stated in the amended Article 397 of the TCC that adopting a different procedure for calling the board of directors to a meeting is possible by regulating it in the company's articles of association.

2.4. Provisional Article regarding the Reinstatement Lawsuits

With the Law, a provision has been added to the Provisional Article 7 of the TCC. In accordance with the newly adopted provision, in the reinstatement lawsuits of companies or cooperatives whose de-registered from the trade registry pursuant to the Provisional Article 7 of the TCC, no judicial expenses and attorney fees will be awarded against the relevant trade registry directorate. 

2.5. Provisional Article regarding the Minimum Capital

The minimum capital amounts of joint stock companies and limited liability companies have been amended to be effective as of January 1, 2024, in accordance with the decision of the President announced on November 25, 2023 (“Decision”) (Please see the information note on this subject herein: https://www.ozel-law.com/publications/minimum-capital-amounts-of-joint-stock-companies-and-limited-liability-companies-have-been-increased.html). Pursuant to the Decision, minimum capital of joint stock companies to be established as of January 1, 2024 must be TL 250,000, and of limited companies must be TL 50,000. In addition, the initial capital and the issued capital of the non-public joint stock companies that will adopt the registered capital system as of January 1, 2024 must be TL 500,000.

The above-mentioned capital amounts were introduced with the Decision; however, there was no provision as to the existing companies' minimum capital requirement in the Decision. With the Law, Provisional Article 15 has been added to the TCC in this regard. Pursuant to the Provisional Article 15:

(i) Companies those established before January 1, 2024 and are still operating and whose minimum capital remains below the new amounts are required to comply with the new minimum capital amounts.

(ii) The deadline for compliance with minimum capital amounts is December 31, 2026.

(iii) Companies that do not comply with the minimum capital amounts by the specified date will be deemed to have dissolved.

(iv) In the general assembly meetings to be held to comply with the minimum capital amounts, the meeting quorum stipulated in the TCC will not be required. The relevant resolutions will be taken by the majority of votes present in the meeting. Additionally, privileges may not be exercised against such resolutions.  

(v) Non-public joint stock companies that have adopted the registered capital system will be deemed to have exited this system unless they increase their initial capital and issued capital by the said date.

Kind regards,

For information and inquiries please contact:

info@ozel-law.com

ÖZEL Attorneys-at-Law

This bulletin has been prepared on 7/5/2024 in order to share the legal developments in Turkish law. It does not include any legal advice nor guidance; for general information only.