Law Proposal on the Amendments on the Turkish Commercial Code Numbered 6102 and Certain Laws in Offered to the Parliament 07 May 2024

The scope of the amendments envisaged in the draft law and the objectives to be achieved are stated as follows;
 

• Amendments to the Turkish Commercial Code and related laws to extend the deadline for registration in the Cooperative Information System,
• Clarification of the Competition Board's authority to change positions, titles and degrees,
• Amendment of the defense procedure in order to accelerate the Competition Board's investigation process in cases where there is not yet an allegation of infringement,
• Utilizing only the allocation method in the sales places in closed market places,
• Changes to the structure and functions of the board of directors in joint stock companies,
• Ensuring the adjustment of joint stock and limited liability companies that fall below the minimum capital amounts,
• Regulation on the authority of the Advertisement Board to remove content and block access,
• Making arrangements for the recognition of the right to timeshare vacation and the sale of timeshare vacations,
• Regulation of inspections on exorbitant price increases and stockpiling, and increase of administrative fines for these acts,
• Increasing administrative fines to be imposed on companies exporting unsafe products.
   

What are the changes envisaged within the scope of Joint Stock and Limited Liability Companies?
 

(i) The first amendment planned to be introduced with the proposal is foreseen for the non-transferable duties and powers of the board of directors in joint stock companies. Pursuant to subparagraph (d) of paragraph 1 of Article 375 of the TCC currently in force, the assignment and dismissal of directors and persons with the same function and signing authority are among the non transferable and inalienable duties and powers of the board of directors.
 

With the amendment envisaged in the draft law, the authority to assign and dismiss branch managers and other authorized signatories will be removed from the non transferable powers of the board of directors. In conclusion, if the draft law is adopted and enters into force, it will be possible for the board of directors to delegate the authority to appoint and dismiss branch managers and other authorized signatories.

(ii) Another amendment envisaged by the proposal closely concerns the members of the board of directors of joint stock companies. Paragraph 7 of Article 392 of the Turkish Commercial Code No. 6102, which regulates the right of board members of joint stock companies to obtain and review information, stipulates that each board member may request the chairman of the board of directors to call the board of directors to a meeting in writing.
 

Although the aforementioned Paragraph 7 of Article 392 of the TCC is retained, unlike the current regulation, it is stipulated in the proposal that 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 within thirty (30) days from the date of receipt of the written request. In the event that the board of directors is not convened within this period or the chairman of the board of directors or his deputy cannot be reached, the meeting may be called directly by the requestors. Finally, the proposed law clearly states that the articles of association of the company may specify a different procedure for calling the board of directors for a meeting.
 

(iii) The proposal envisages the addition of the following sentence to Paragraph 15 of the current Provisional Article 7 of the TCC; "In the proceedings to be held regarding the revival of the company or cooperative whose registration has been deleted in accordance with the procedure stipulated in this article, no judicial expenses and attorney's fee shall be awarded against the relevant trade registry directorate." In the event that this amendment is adopted and enters into force, no judicial expenses and attorney's fees will be imposed against the trade registry directorates as a result of the revival lawsuits filed by naming the trade registry directorates as the defendant in order to regain legal entity due to the debts of the companies whose trade registry records have been canceled.
 

(iv) The bill envisages the addition of the following provision to the TCC as Provisional Article 15;
 

"PROVISIONAL ARTICLE 15- (1) Joint stock and limited liability companies whose capital is below the minimum capital amount shall increase their capital to the amounts stipulated in Articles 332 and 580 until 31/12/2026, otherwise they shall be deemed to have dissolved. Non-public joint stock companies that have adopted the registered capital system with an issued capital of at least 250,000 Turkish Liras shall be deemed to have exited from this system unless they increase their initial capital and issued capital to 500,000 Turkish Liras by the aforementioned date. (2) In the general assemblies to be held for the increase of the capital to the amounts stipulated in Articles 332 and 580, no meeting quorum shall be required, decisions shall be taken by the majority of the votes present at the meeting and no privilege shall be exercised against these decisions. (3) The Ministry of Trade may extend the period stipulated in the first paragraph for a maximum of two times for one year."
 

With the last amendment to the TCC, the minimum initial capital for joint stock companies was increased to 250,000 Turkish Liras, the minimum initial capital for nonpublic joint stock companies that have adopted the registered capital system was increased to 500,000 Turkish Liras, and the minimum initial capital for limited liability companies was increased to 50,000 Turkish Liras. This amendment was valid for joint stock and limited liability companies established after 01.01.2024 and did not cover companies established before this date. For the reason explained in the proposed law, it is obligatory to ensure the adjustment of joint stock and limited liability companies established before 01.01.2024 to the increased minimum capital amounts until 31.12.2026, and it is regulated that companies that do not meet the minimum capital amounts in the provision will be deemed to have dissolved. However, in order to prevent possible victimization, it is regulated that non-public joint stock companies that have adopted the registered capital system and whose initial capital does not meet 500,000 Turkish Liras will not be deemed to have dissolved as long as their issued capital is 250,000 Turkish Liras and above, and will only be deemed to have exited the registered capital system.
 

If the text of the draft law is adopted, Article 1 of the Law on Amendments to the Turkish Commercial Code and Certain Laws regarding the Cooperatives Law will enter into force on 26.04.2024 and the other articles will enter into force on the date of publication.
 

You can access the text and justification of the proposal from the link below:
 

https://cdn.tbmm.gov.tr/ KKBSPublicFile/ D28/ Y2/ T2/ WebOnergeMetni/ 73c0fde0-ad2a-4cd5-bb4b-be3552d2014b.pdf