Turkish Joint Stock Company / Company Limited By Shares

Doç. Dr. Murat Yusuf AKIN

Table of Contents
Prolog .............................................................................................................................................. 7
Introduction ................................................................................................................................. 9
I. Classification by the number of the shareholders....................................... 10
II. Classification by the legal entity ............................................................................ 11
III. Classification by the liability of the shareholders ...................................... 12
IV. Classification by the mandatory capital requirement .............................. 14
V. Classification by the regulating law ..................................................................... 15
VI. Classification by the key figures of the company ......................................... 16

Chapter 1
I. Definition and Economic Importance ................................................................. 17
A. Definition ......................................................................................................................... 17
1. Legal Personality ...................................................................................................... 19
2. Shares and Share Capital ...................................................................................... 20
3. Exclusive liability of the company .................................................................... 21
B. Economic Importance ................................................................................................ 22
1. Limited liability......................................................................................................... 23
2. Capital vs person ...................................................................................................... 23
3. Transferability of the shares .............................................................................. 23
C. Types of CLS .................................................................................................................... 24
1. Publicly traded companies .................................................................................. 24
2. Publicly listed companies ..................................................................................... 25
3. Holding Companies ................................................................................................. 25
4. Operating companies ............................................................................................. 26
5. Companies of under CML ..................................................................................... 26
6. One-Person companies.......................................................................................... 26
D. Alternatives to the CLS .............................................................................................. 27
1. Limited liability company (Art. 573-644) .................................................... 27
2. Partnership limited by shares ........................................................................... 28

Chapter 2
I. Incorporation .................................................................................................................... 30
A. Preparation for the Establishment ....................................................................... 31
B. Establishment Stage .................................................................................................... 31
1. Founders ...................................................................................................................... 31
2. Articles of association ............................................................................................ 31
a. Mandatory content of the articles of association .................................. 33
b. Conditionally necessary content of the articles of association ....... 36
c. Optional content of the articles of association ....................................... 40
d. Amendment of the articles of association ................................................ 41
3. Subscription of the shares and payment ...................................................... 41
4. Appointing the BoD ................................................................................................ 43
II. Qualified Incorporation .............................................................................................. 43
A. Incorporation with capital in kind ........................................................................ 44
B. Incorporation with acquisition in kind ............................................................... 45
C. Take over a business/enterprise as a contribution in kind or
acquisition in kind ....................................................................................................... 46
D. Special privileges for the founders or other persons ................................... 46
III. Acquiring the Legal Personality ............................................................................ 47
A. Effect of the registration............................................................................................ 48
B. Application to the trade registry ........................................................................... 49
C. Inspection by the trade registry ............................................................................ 50
D. Publication in Turkish Trade Registry Gazette ............................................... 50
E. Legal acts prior to the registration at the trade registry ............................ 51
1. Shares issued prior to registration .................................................................. 51
2. Obligations borne before the registration of the company .................. 52
F. Defective Incorporation ............................................................................................. 53

Chapter 3
Corporate Bodies
I. General Remarks ............................................................................................................. 54
II. Board of Directors .......................................................................................................... 56
A. Function ............................................................................................................................ 56
B. Election, removal and resignation ........................................................................ 56
1. Election and eligibility requirements ............................................................. 56
2. Removal ....................................................................................................................... 59
3. Resignation ................................................................................................................. 60
C. Duties of the BoD .......................................................................................................... 61
1. Management ............................................................................................................... 61
2. Representation .......................................................................................................... 63
3. Inalienable (non-transferable) Duties of the BoD ..................................... 65
4. Further Duties ........................................................................................................... 68
C. BoD Meetings and Resolutions ............................................................................... 68
D. Defective Resolutions ................................................................................................. 70
E. Rights and the Duties of the BoD Members ...................................................... 71
1. Rights of the BoD members ................................................................................. 72
2. Duties (obligations) of the BoD members .................................................... 74
III. General Assembly ........................................................................................................... 80
A. Non-transferable (inalienable) Authorities ...................................................... 80
1. Amendment of the articles of association ..................................................... 81
2. Election of the members of the BoD, determination of their
pecuniary rights and their release ................................................................... 81
3. The election and the removal of the auditor ............................................... 82
4. Approval of the annual accounts, as well as the resolution on the
allocation of the balance sheet profit, in particular the determination
of the dividend and the directors' share of profits and resolutions
regarding the annual report................................................................................ 83
5. Dissolution of the company apart from the legal exceptions ............... 83
6. Wholesale of significant amount of company assets................................ 83
B. Types of General Assembly Meetings .................................................................. 84
1. Ordinary general assembly meetings ............................................................ 84
2. Extraordinary general assembly meetings .................................................. 85
3. Universal general assembly meetings ................................................................. 85
4. Special general assembly meeting of the privileged shareholders ... 86
C. Preparation for the general assembly meeting ............................................... 87
1. Convening the general assembly meeting .................................................... 87
2. Persons authorized to convene the general assembly meeting .......... 88
3. Persons authorized to participate to the general assembly meeting 89
4. Attendees List ............................................................................................................ 90
5. Place of the general assembly ............................................................................ 91
D. Conducting the general assembly meeting and minutes of meeting ..... 91
E. Principle of adherence to the agenda .................................................................. 93
F. Representation of the shareholders ..................................................................... 94
G. Voting right ..................................................................................................................... 95
1. Privileged shares with more voting rights ................................................... 96
2. Exclusion of the voting right ............................................................................... 97
3. Suspension of voting right ................................................................................... 98
4. Voting at the general assembly .......................................................................... 99
F. Postponement of the general assembly meeting ............................................ 99
G. General assembly resolutions and quorum requirements ..................... 100
H. The nature of the general assembly resolutions ......................................... 101
I. Electronically held general assembly meetings ............................................ 102
J. Defective general assembly resolutions ........................................................... 103
1. Non-existence ......................................................................................................... 103
2. Nullity or invalidity .............................................................................................. 104
Common provision to the non-existent and null and void decisions .. 105
3. Voidability ................................................................................................................ 105
Bibliography .......................................................................................................................... 109