Recent Amendments To The Turkish Commercial Code

The Turkish Commercial Code numbered 6102¹ (the "TCC") has recently seen piece-meal amendments pursuant to (i) Law no. 7069 Amending the Decree Law²; (ii) Law no. 7078 Amending the Decree Law³; (iii) Law no. 7079 Amending the Decree Law⁴; (iv) Law no.7099 Amending the Laws for the Improvement of the Investment Environment; and (v) Law no. 7101 Amending the Law on Insolvency and Bankruptcy and Other Laws (the "Amending Laws").

A high-level summary of notable amendments is as follows:

• Payment deferral on incorporation capital for limited liability companies
  
  Possibly the most material among the suite of amendments, the requirement in article 585 of the TCC for founders of limited liability companies to pay 1/4th of subscribed incorporation capital before registration has been disapplied.
  
  Note that this does not extend to joint stock companies (anonim şirket) where founders will still be required to pay 1/4 of subscribed incorporation capital before registration.
• Trade registry to certify certain incorporation documents
  
  Founders of limited liability companies will sign incorporation articles in the presence of authorised registry officials according to amended articles 575, 585 and 587 of the TCC.
  
  Similarly, merchants will provide their statements of signature as required by article 40/2 of the TCC by signing specimens in the presence of authorised registry officials and corporate ledgers of joint stock companies and limited liability companies, which are required by article 64/3 of the TCC to be certified during incorporation, will be certified by the directorate of relevant trade registry.
  
  Previously, all of these processes would have required notarisation and although the TCC did allow for the trade registry to provide certification services for corporate ledgers, this was never implemented. 
• Institutional proxy voting
  
  Articles 428, 430 and 431 of the TCC regulating procedural steps around professional proxy voting and other institutional forms of shareholder representation, which had not seen much demand or use in the context of non-public companies and arguably created more confusion than actual benefit, have been deleted entirely.
• Simplified legal proceedings
  
  Simplified legal proceedings (basit yargılama usulü) will apply to commercial disputes with a value not exceeding TRY100,000.

Overall, the majority of the amendments brought about by the Amending Laws are procedural relaxations intended to reduce bureaucratic formalities and costs associated with incorporation and general day-to-day corporate governance of businesses. This appears complementary to the recent stream of new legislation issued by the Government to improve investment climate and facilitate and promote new investments and business.

Footnotes

1. Published in the Official Gazette numbered 27846 and dated 14 February 2011.

2. Published in the Repeating Official Gazette numbered 30354 and dated 8 March 2018.

3. Published in the Repeating Official Gazette numbered 30354 and dated 8 March 2018.

4. Published in the Repeating Official Gazette numbered 30354 and dated 8 March 2018.

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.