AMENDMENT ON TURKISH COMMERCIAL CODE HAS BEEN ENACTED
With the Law No. 7511 on the Amendment of the Turkish Commercial Code and Certain Laws ("Amendment Law"), which entered into force after being published in the Official Gazette dated 29.05.2024 and numbered 32560, amendments were made to the Turkish Commercial Code No. 6102 ("TCC") and some other laws.
1- Regulation on the minimum capital of companies
Pursuant to the Presidential Decree published in the Official Gazette dated 25.11.2023 and numbered 32380, the minimum initial capital amounts required for the establishment of companies were increased. The minimum initial capital amount for joint stock companies was increased from 50.000-TL to 250.000-TL, the minimum initial capital amount for non-public joint stock companies that have adopted the registered capital system was increased from 100.000-TL to 500.000-TL, and the minimum initial capital amount for limited liability companies was increased from 10.000-TL to 50.000-TL.
The Amendment Law provides a clear regulation on how to act for companies whose capital is currently below the specified amounts. Joint stock and limited liability companies that were registered in the trade registry before 01.01.2024 and whose capital is below the new minimum capital amount must adjust to the new capital amounts until 31.12.2026, otherwise they will be deemed to have dissolved. These companies will be required to initiate the liquidation process and cancel their trade registry records. It is stated that non-public joint stock companies that have accepted the authorized capital system will be deemed to have exited from this system if they do not increase their capital until the said date.
2- Amendments to the non-transferable duties and powers of the Board of Directors
Article 375 of the TCC has been amended with the Amendment Law. The powers of appointment and dismissal of branch managers and authorized signatories other than the senior executives of the company have been removed from the non-transferable powers of the board of directors, and the powers regarding such appointments and dismissals have been made transferable by the board of directors.
Thus, upon the updates and amendments to the articles of association and existing internal directives of the companies in this direction, the powers to appoint and dismiss branch managers and authorized signatories other than the senior executives of the company can be transferred and reorganized by the board of directors.
3- Regulation on the term of office of the chairman and deputy chairman of the board of directors
The Amendment Law abolishes the requirement to elect the chairman and vice-chairman of the board of directors every year and now allows them to be elected in line with the term of office of the board of directors. Therefore, it is possible for joint stock companies to determine the duties of the chairman and vice-chairman of the board of directors in line with the term of the rest of the board of directors in their board of directors’ election processes.
4- Regulation on the right to information and inspection
Pursuant to Article 392 of the TCC, only the chairman of the board of directors, and in cases where the chairman of the board of directors could not be reached, the deputy chairman of the board of directors was authorized to call the board of directors for a meeting. However, with the Amendment Law, other members of the board of directors are also authorized to call a meeting.
Pursuant to the Amendment Law, each member of the board of directors may request the chairman in writing to call the board of directors for a meeting. If the request is deemed appropriate, the call will be made by the chairman of the board of directors. However, upon the written request of the majority of the members of the board of directors, the chairman of the board of directors is obliged to call the board of directors for a meeting to be held within thirty days at the latest from the date of receipt of the request. In cases where the board of directors is not called for a meeting within this period or the chairman or the vice chairman cannot be reached, the call may be made directly by the requestors. The articles of association may specify a different procedure for calling the board of directors for a meeting.
5- Regulation on liquidation procedures
Pursuant to the addition made to the fifteenth paragraph of the provisional Article 7 of the TCC, in the proceedings to be held regarding the revival of the deregistered company or cooperative, the relevant trade registry directorate shall not be charged with legal expenses and attorney fees.
Conclusion
In particular, with the new regulations on corporate law, clear regulations have been introduced to facilitate the transactions of companies and how to act. These amendments will contribute positively to the growth and development of companies. Therefore, it is important for companies to adapt the aforementioned new regulations to their own transactions as quickly as possible in order to prevent any non-compliance.