Recent Changes in the Turkish Commercial Code

With the Law no. 7511 Amending the Turkish Commercial Code and Certain other Laws (the “Amendment Law”), which entered into force after being published in the Official Gazette dated 29.05.2024 numbered 32560, amendments are made primarily to the Turkish Commercial Code numbered 6102 (the “TCC”) and other certain laws. We present below the important amendments introduced by the Amendment Law within the scope of the TCC in order to provide convenience to corporate transactions and to eliminate the hesitations in practice on certain matters.

The minimum capital amounts of joint stock and limited liability companies must be adjusted until 31.12.2026

Pursuant to the Presidential Decree no. 7887 published in the Official Gazette dated 25.11.2023 and numbered 32380, the minimum capital amounts were set as TRY 250,000.- for joint stock companies and TRY 50,000.- for limited liability companies that are established after 01.01.2024. Joint stock and limited liability companies established before 01.01.2024, whose capitals are currently below the new minimum capital amounts, are now obliged to adjust their capitals in line with the new minimum capital amounts before 31.12.2026. Otherwise, companies that have not adjusted their capitals as of the aforementioned date shall be deemed to have dissolved. Accordingly, before 31.12.2026;

— Joint stock companies are required to increase their capital to at least TRY 250,000.

— and limited liability companies are required to increase their capital to at least TRY 50,000.

— Non-public joint stock companies that have accepted the registered capital system are required to increase their initial capital and issued capital to at least TRY 500,000.

— otherwise they will be deemed to have exited the registered capital system.

Limited to capital increases to be made in order to comply with the new minimum capital amounts, and to avoid any quorum obstacle in the decisions to be taken, no meeting quorum will be required in the general assemblies, the decisions regarding the capital increase will be taken with the majority of the votes present at the meeting and no privilege can be used against these decisions.

The power to appoint and dismiss persons other than senior executives of the company can now be delegated by the board of directors

With the Amendment Law, the powers regarding the appointment and dismissal of branch managers and authorized signatories, other than the senior executives of the company, have been removed from the category of non-transferable powers of the board of directors and the powers regarding such appointments and dismissals are now made transferable by the board of directors. In this regard, the appointment and dismissal of branch managers and authorized signatories other than the senior executives of the company will no longer be required to be made by the board of directors.

After this amendment, the powers to appoint and dismiss branch managers and authorized signatories other than the senior executives of the company can now be transferred by the board of directors, and updates and amendments can be made to the existing articles of association and existing internal directives of the companies in line with this change.

In joint stock companies, the chairman and vice-chairman of the board of directors can now be elected in line with the term of office 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 office of the rest of the board of directors in their board of directors’ election processes.

In case of meeting requests made to the chairman of the board of directors by the majority of the board members, the chairman of the board of directors is now obliged to call the board of directors to a meeting.

Another important amendment has been introduced with the Amendment Law in order to resolve the disputes in practice regarding the delay in the decision-making processes of the companies and the prevention of the reflection of the will of the majority of the board of directors, created due to the authority to call the board of directors to a meeting only being vested to the chairman or vice-chairman.

The Amendment Law obliges the chairman of the board of directors to call the board of directors within 30 days at the latest from the date of receipt of the written request of the majority of the members of the board of directors. In the event that the chairman of the board of directors fails to call the board of directors meeting within the said 30-day period, or in cases where the chairman or the vice-chairman cannot be reached, a relief has also been set forth that the meeting may be called directly by the members of the board of directors requesting the meeting.

The amendments introduced, regarding the capital structures of companies in particular, will contribute positively to the future growth and development of companies and will make Türkiye’s trade environment more competitive. Therefore, it is important for companies to adjust their capital structures by considering the new minimum capital amounts in order to prevent any incompliance.

First published by Gün + Partners in May 30, 2024.