As part of the innovations brought by the Turkish Commercial Code No. 6102 ("TCC"), regulations on corporate transparency are increased. TCC Article 1524 has made it obligatory for corporations to set up a website and make announcements as put forth in the relevant legislation on such web site. This obligation is regulated under the Regulation on Websites to be Set Up by Corporations ("Regulation") published in the Official Gazette dated 31.05.2012 and numbered 28663.
Corporations with the Obligation to Build a Website
According to Article 124 of the TCC and Article 2 of the Regulation, companies that fall within the scope of the Regulation shall be determined pursuant to Article 397 of the TCC. In line with this, companies that are subject to independent auditing pursuant to the Decision on the Determination of the Companies to be Subject to Independent Auditing are also obliged to build a website and make the announcements as set out in the Regulation within such website. Companies that fall within this scope are those which have net assets with a value equal to or above TRL 150,000,000, annual net sales revenue equal to or above TRL 200,000,000, and 500 or more employees by themselves or cumulatively with their affiliates and subsidiaries; as well as the finance, asset management and rating companies that are active in finance as stipulated within the Annex of the Decision.
Obligation to the Build a Website
Companies incorporated after the entry into force of the Regulation must build a website within three months of registering with the trade registry, and companies incorporated before such time must build a website within a period of three months as of 01.07.2013, that is to say by 01.10.2013 at the latest. Companies that meet the above mentioned criteria after the entry into force of the Regulation must build a website within three months. Companies shall allocate a section of their website to announcements that must be made pursuant to the law.
The issues to be announced on the website must be posted on the website within the period of time set out in the relevant legislation. If no such specific period of announcement has been set forth, then announcement shall be made within five days following either the realization of the relevant event, the registration with the trade registry or the announcement in cases where registration and announcement are required in order for the relevant transaction to become valid. Previously known information and issues must be included within the website immediately.
Companies may use central database service providers, who are private law entities operating under the official authorization of the Ministry of Custom and Trade, to organize their website and keep the content (to which access must be allowed via secure mediums) available for the company to access and archive. However, this is not an obligation. Pursuant to the Capital Markets Code, such services shall be provided by the Central Registry Agency for companies with shares registered with them.
Content of the Website
The content which may be included within the website is not limited. The provisions aim to increase transparency and there are no restrictions with respect to the documents, reports, calls for meetings, tables and other information which may be published. However, there are certain issues which are required to be announced according to the Regulation.
The content to be included within the website has been categorized with respect to the amount of time it must remain on the website. Information regarding the company's title, address, paid and unpaid capital and the members of the management body (that is to say members of the board of directors for joint stock companies and managers for limited liability companies), as well as the auditor must be kept available for access at all times.
If a legal entity is appointed as a member of the board of directors or as manager in a joint stock company or a limited liability company, then the information for such legal entity as well as its proxy must be made available on the website at all times.
The amendments on such information shall also be published on the web site as of the date of the relevant amendment.
Content to be Included for a Minimum Period of Six Months
Content that must be made available for a minimum period of six months includes the following:
- For companies participating in a merger or demerger, announcements to be made to creditors and the documents subject to the right of inspection within the scope of the relevant legislation;
- If a lawsuit for the dissolution of the company has been filed, declaration with respect to the suit filed and the final court order issued with respect to the dissolution;
- The resolution for the convocation of the general assembly, if the general assembly meeting is postponed due to the postponement of negotiations regarding the financial statements and related issues;
- The Minutes of the general assembly meeting and the privileged shareholders' general assembly;
- The resolution to represent and bind adopted by the board of directors of joint stock companies and managing board of limited liability companies;
- Internal directives including the working procedures and principles of the general assembly in joint stock companies;
- Announcements with respect to the representative of a company body, an independent representative and a company representative;
- Resolutions of the general assembly regarding the amendment of the articles of association;
- For companies that are in the registered capital system, information related to registered capital regulations;
- Board of directors' resolutions which regulate the rules for the acquisition of newly issued shares;
- Board of directors' report explaining restrictions to or removal of the pre-emption rights of shareholders on new shares, issuing new shares with or without a premium and explaining the calculation method of the premium;
- The Report of the managing body in the event of a decrease in capital, announcement to convene the general assembly, announcement for decreasing principal capital;
- The Announcement to convene the managing body for payment of share amounts, invitation and notification to shareholders in default and resolution regarding cancellation of share certificates of the shareholders in default;
- Board of Directors resolution with respect to the issuance of bearer share certificates;
- Trade Registry Gazette announcement to inform creditors in the event the company is dissolved;
- The Acquisition of the company shares by a company from within the same group company within the threshold levels stated under Article 198 of the TTC or selling them out;
- The removal of a ship from the ship registry within the framework of article 996 of the TCC;
- The disclosures of members of the board of directors, directors of undertakings and corporations, their relatives as determined within the relevant legislation and the companies in which such directors and their relatives hold at least 20% of the shares with respect to the shares that they hold in group companies;
- The dominance agreements executed between companies;
- An announcement that the number of shareholders in the company has decreased to one or that the company has been incorporated by a sole shareholder, and information related to that sole shareholder;
- The agreement regarding the acquisition or lease of an enterprise or a real property for an amount exceeding one tenth of the capital, within 2 years following the registration of the company; and
- Where the board of directors, managers board or general assembly meeting has been held electronically, the technical report proving that the electronic tools used by such persons are suitable for active attendance.
The above-mentioned content shall be made available on the website for at least six months, otherwise it shall be deemed to not have been posted on the website.
Non-Compliance with the Website Obligations
Non-compliance with the obligation to build a website and not to make the required announcements via that website as detailed above, shall constitute a cause for the annulment of the related decisions. Also, the managers and the members of the board of directors who are at fault for such negligence shall be held liable.
As stipulated in the grounds of the TCC articles, the regulations regarding the company's website are open to evolvement. With the provisions brought by the TCC, various types of basic information regarding the company will become available publicly. As non-compliance with the obligation to build a website and the realization of the announcements may cause the nullity of the relevant company decisions, the requirements and periods brought by the Regulation must be taken into due consideration.
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.