The purpose of natural and legal entities in bringing funds into a company is to invest for profit sharing. The right to information and inspection by the shareholders is of great importance in terms of enabling the shareholders to audit the ability of the company to achieve those goals, and to exercise another partnership rights.
For limited liability companies, which is the most common form of business in Turkey, this right is regulated under Article 614 of Turkish Commercial Code numbered 6102 ("TCC"). This Newsletter article examines the limitations to the right to information and inspection by the shareholders in limited liability companies, and aims to raise shareholders' awareness.
The Essence of the Right to Information and Inspection
In contrast to joint stock companies, the transfer of shares in limited liability companies is subject to stricter provisions, and the approval of the general assembly is mandatory. For this reason, auditing becomes more valuable for shareholders in limited liability companies. According to Article 614 of the TCC ("Article"), which regulates the right to information and inspection by the shareholders in limited liability companies:
(1) Each shareholder may request information about all company business and accounts from managers and can conduct inspections regarding certain matters.
(2) If there is a risk that a shareholder who obtained information may use it in such a way that will damage the company, the managers may prevent access to information and inspection to the extent necessary; a shareholder who wishes to dispute this motion may apply to the general assembly, which may decide whether this individual shall have access to the information.
(3) If the general assembly prevents access to information and inspection without just cause, the shareholder may seek a court order on this issue, and the court's decision shall be final.
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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.