With new Turkish Commercial Code numbered 6102 will be enacted on 01.07.2012 (Hereinafter referred to as “New TCC”) the legal, administrative and financial structure of joint stock companies have significantly undergone change. Some basic renewals related to Limited Liability Companies taking place at New TCC namely are; The renewals regulated regarding jointstock companies between article 329 and 563 are as follows;
1-Establishment,the numbers of founder shareholder and shareholders
There are some renewals about the establishment of joint stock companies at new TCC.
According to the new code, founders’ declaration should include the type of capital during establishment, capital commitments, capital in kind, when there is an acquired establishment, the reports related to this and requirement for acquisition, the price and cost of acquired assets features, the commissions shall be paid and company commitments.
The declaration that has got binding feature is reserved after analysis of audit and registration manager at registration directoriate. In case the context of declaration is contrary to reality, the judicial fine shall be amerced which shall not less than three hundered days against declarant.
In accordance with article 338 of new TCC, as at regulation about limited liability companies,.joint stock companies can be established by one or more founders However if the number of shareholder reduces to one, this situation and the transaction leading to this consequence should be declared in written way to board of directors within seven days as of accrual date. The board of directors should make register and announce that company is a company with one shareholder, and the name,citizenship and domicile of one shareholder The new regulation is not allowed to acquisiton of its own shares causing that the company has become with one company shareholder.
2-The board of directors
The renewals about board of directors at new TCC are as follows;
- With new regulation, the board of directors bodied with one person becomes possible.
- The compulsory rule that shareholders should be member of board of directors is abolished.
- The member/members of board of directors can be legal entity. Therefore legal entities can be at company board of directors by a representative that shall be appointed. However first of all, this legal entity should be registered and announced at commercial registration and at website of company for voting as representative at board of directors
- There is compulsory that at least ¼ of board members should be graduated from university(higher education).
- Board shall successively be responsible for their negligence excluding board with one person.
- The compulsory of at least one person at board members should has domicile in Turkey and be Turkish citizen has been regulated.
- The board meetings can be held in electronic form.
Furthermore new TCC has regulated an optional insurance system for compensation of company’s loss arising out of negligence of board members However the insurance system is compulsory for banks, private and general financial establishments, leasing, factoring companies, capital markets institutions and publicly held company.
With new TCC, 4 different quorum for amendment of articles of association is determined.
- The resolution with unanimous ; the resolutions that decides liability and second liability for ending of loss at balance and moving of head office of company to the abroad
- The resolution should be given with at least affirmative votes of at least 75% of capital stock ; the complete amendment of business scope of company, preferred stock ,the restriction of assignment of registered share
- The resolutions should be given with at least affirmative votes of at least 50% of capital stock ;decisions about all kinds of amendments at articles of association, changing kind and merger and acquisition,
- The resolutions should be given with at least affirmative votes of at least 60% of capital stock; decisions about abolishment or restriction of obtaining of new share,
1/4 of capital should be attended to the ordinary meeting and majority of votes should decide at the companies of which shares trading on the stock exchange.
Furthermore with new TCC general assembly can be held in electronic form However there shoud be a website of company that is peculiar to system for usage of stated system.
As per new code, there is regulation for 2 different kinds of capital. According to paragraph 1 of article 332 of new TCC, the nominal capital that is capital totally committed at articles of association should be at least 50.000 TL. On the other hand, at the joint stock companies that are not publicly held however its registered capital is approces the commenced capital should be at least 100.000 TL .
Therefore with new TCC, even if a joint stock company is not subjected to Securities Exchange Act , it can be accepted to the registered capital system. For that reason, the procedure of being the publicly held joint stock company eases for the joint stock companies which are not publicly held.
As per paragraph 3 of article 332 of new TCC, if the joint stock companies that are not publicly held however its registered capital are not comply with the conditions anymore, it is possible to be gone out of the system by obtaining permit from Ministry of Industrial and Trade However in case the ministry determines that joint stock company lost to the conditions for being in the system of registered capital, the transaction of going out of system shall be eventuated per se.
With new TCC, payments in cash shall be just deposited to the private bank account opened for the company that is being established for the usage of company The bank shall just pay this amount to the company upon the writ of commercial registration directoriate including that company is incorporated. However if the company shall not incorporated within 3 months as of notary approval of articles of association, the amounts shall be paid to the owner with the writ of commercial registration directoriate related to this subject.
New TCC is not allowed to the shareholders to become indebted to the company. On the other hand, article 358 of new regulation states that debts of shareholders arising out of application form or a transaction eventuated in accordance with company, scope of company and shareholder’s company and scope of arising out of the transactions are exemption of taking on debt forbidden
In case shareholders become indebted to the company excluding these exemptions, the judicial fine shall be amerced not less than three hundred days is regulated at the new TCC.
Shareholders can demand to check the information related to the commercial books of company, financial and consolidated charts, annual reports of board of directors, audit report and profit share proposal before 15 days of general assembly meeting. Besides this,upon being demanded at general assembly;, shareholders can submit their demands for the type of audit and its conclusion of company.
The new rights added to shareholders’ rights such as withdrawing from company at merger, the right of being proposed at conditional capital increasing, appointment of audit, the annulment of merger, spin-off and changing kind of companies or responsibility cases regarding these transactions support to the situation of shareholder .
With new TCC joint venture companies can acquire its shares. Accordingly, companies can take in pawn and acquire their shares provided that 10% of company capital is not exceeded. However the following conditions should be fulfilled for eventuating of this transaction.
The regulation about audit at joint stock company has been abolished with new code.However the audit of company is left to the independent audit institutions or at least one certified public accountant or chartered accountant.
In conclusion, with new Turkish Commercial Code numbered 6102, there are parallel amendments such as the number of shareholders and company audit on limited liability companies and joint stock companies and by this new regulation joint stock companies shall have more fiduciary and transparent substructure.