THE STATUS OF CREDITORS IN STOCK COMPANY LIQUIDATIONS(JANUARY 2017)

Stock Companies are kind of establishments that have the aim of endowment at a certain level, making profit and performing its activities continuously and independently. In their articles of association the duration would be set for a certain or unlimited time, however, a company would cease its main aim which is making profit and decide to liquidate the entity before their specified duration. Such a stock company changes its aim as the collection of its credits and paying its debts.  

In other words, the main purpose of the stock company in liquidation are completing the process about liquidation in accordance with the procedure, payment of all current debt and credits and the cancellation of the trade name of the company from trade registry. This purpose shall be met by the liquidator or the board of directors. Notification for the liquidation and invitation for collecting the credits shall be performed by these attendants.  

Creditors whose credits have been previously registered in company books or other documents and have specified address known by the company shall be called via registered letter to submit their credits to the company. The other creditors shall be informed about liquidation of the company via three separate announcements that should be published every week in the Trade Registry Gazette. However, such announcement should also be placed in the internet site of the company and the procedure for announcements should also be met by the way according to articles of association of company. The balance of liquidation shall not be distributed upon the expiration of one year fallowing the third call(or announcement).  

Creditors of the company in liquidation shall not be considered as the third persons for the company. The causes of debt/credit between the company and creditors/debtors have no significant importance in such a procedure. There might also exist creditors who have already been notified for the call and whose credits are doubtless, however they would have not called for their credits even though they had previously been invited by the company to do so.  

The due debts to the creditors whom have been called, shall be deposited into a deposit account to be opened at;  

  • the branch of public owned Ziraat Bank which shall be the nearest to registered head office of the company or
  • the nearest branch of this Bank in case this Bank has not any branch office at the place of the registered office of the company by the liquidators.. 

The trade registry of the company shall be notified about the identities of the creditors whose credits had been deposited and the information of the bank account. Such a list is kept by trade registry and issued on internet site. Creditors would only demand the payment from the bank via presenting the document which is provided by the trade registry that shows that they are the eligible creditors. The maturity date of the deposit should be met by creditors in case they would like to receive the month’s interest. Such an account and possible claim of the creditors would be acceptable in ten years period which is the statute of limitation under law. 

Any debts which are executory and are in controversy shall not be covered in the above mentioned process. The liquidators are supposed to deposit the certain amount of money to a notary public which would compensate such debts in case they have not been secured enough via any other funds. The executory debts of the company shall be paid to creditors via adjustment to date based on the rate of short term credits announced by Turkish Central Bank. Creditors have no right to refuse such cash discount as long as their credits are not mentioned to be from the non-discountable credits. 

Liquidators who act against the regulations of company liquidation procedures shall be held responsible against the company, shareholders and creditors according to their negligence. 

Unlike the bankruptcy procedure, the capital companies which would like to liquidate and cease the entity before their specified duration mentioned in their articles of association are obliged to execute such a liquidation process via liquidators chosen by execution bodies.  

We can mention that liquidators are mainly responsible from collecting the credits, payment of the debts, depositing specified debts to bank or to the notary public in case there exists the mandatory conditions under law and finally making the request for cancellation of the trade name of the company from trade registry upon the completion of all the before transactions. However, any creditors of the company whose credits have not been met shall still be provided right to demand reclamation of the company.