The 2024 Amendments to Turkish Commercial Code(Numbered 6102) introduces significant changes to working principles of the board of directors. New legal change should be examined by legal practitioners including commercial lawyers. The Law Numbered 7511 came into force on May 29, 2024 in changing significant norms applicable to the board of directors.
Introduction
After a company formation, the corporate governance covering the issue of who has power and responsibility about any effective decision on the company represents a second important stage. The 2024 Amendments to Turkish Commercial Code (Numbered 6102) contains significant changes in terms of working conditions of the board of directors within the context of companies. The present article will concentrate on a brief outline of the amendment concerned.
Regarding company formation, see our article on Establishment of a Company in Turkey
and Limited Liability Company Formation
What is the Corporate Governance System in Turkey?
Corporate governance is used to refer to norms, standards and practices intended to an honest management of a company. With regard to joint stock companies, board of directors play a crucial role for a company including structuring senior management, auditing and conducting general assembly and|or board of directors' meetings according to international standards and national principles.
What is the meaning of corporate governance advisory?
An efficient corporate governance advisory must address a set of policies and work including,
- Policies for employing senior executives including member of board of directors,
- Company oversight and management activities to ensure full alignment with regulations, laws and international standards,
- Comprehensive strategies for investment and risk management regarding company formation and type change,
Corporate governance consultancy contains all services obtaining assistance for the initialization of the relevant company. The introduction of full enforcement of international standards for auditing, accounting and supervising of company management is a significant part of corporate governance consultancy. Transparency and accountability are another important aspect for the managerial team.
What are the main legal instruments governing corporate governance in Turkey?
Considering existing and emerging commercial necessities, the Turkish corporate law regime has been updated by policy and law makers over the years in Turkey. But Turkish Commercial Code (Numbered 6102) and Capital Markets Law (Numbered 6362) are two core legal texts to manage corporate governance practice in Turkey.
For more information about how the corporate governance system operates in Turkey, take a look at our practice areas of Corporate Governance
What are the 2024 amendments to Turkish Commercial Code (Numbered 6102)?
The Law Numbered 7511 revising Turkish Commercial Code (Numbered 6102) contains vital modifications to rules for the board of directors. Main components for the reform reads as follows:
- the obligation by the board of directors for the election of a chair and vice chair every year is eliminated from article 366 of Turkish Commercial Code,
- the mandate for the appointment and dismissal of branch managers by the board of directors is abolished under article 375 of Turkish Commercial Code.
- where the chair of the board does not perform his|her duties properly about the call for a meeting, the call for the meeting may be carried out by the members of the board under new version of article 392 of Turkish Commercial Code.
Conclusion
Considering the above-mentioned analysis, it becomes clear that the central intention of the revision to the Commercial Code is to repair shortcomings of the board of directors. Every single legal practitioner including business lawyers should bear in mind all potential results and new requirements set forth in the new reform.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.