Turkey: Memorandum Regarding Mergers of Joint Stock Companies

Last Updated: 7 April 2004
Article by Vural Günal

TABLE OF CONTENTS

I. SUBJECT

II. PROVISIONS OF TURKISH COMMERCIAL CODE

1. Merger By Way of Acquisition

1.1. Call to Creditors

1.2. Separate Management of Assets

1.3. Joint and Several Liabilities

1.4. Court with Jurisdiction Remains Unchanged

1.5. Priority of Creditors of Dissolved Companies

1.6. Validity of Merger of Assets

1.7. Registration of Dissolution

1.8. Delivery of Shares

2. Incorporation of a New Company

2.1. Issues to be Determined in Merger Agreement

2.2. Consent of General Assembly

2.3. Registration of New Company

2.4. Delivery of New Shares

3. Other Common Provisions

III. MERGERS OF PUBLIC JOINT STOCK COMPANIES

1. Provisions of the Law

2. Provisions of the Communiqué

3. Adoption of a Preliminary Resolution for the Merger

4. Determination of the Financial Situation

4.1. Conformity of Financial Statements with the Legislation

4.2. Inflation-adjusted Financial Statements

4.3. Private Independent Auditing

4.3.1. Necessity

4.3.2. Exception

5. Circumstances Requiring New Financial Statements

6. Adoption of a Resolution Regarding Distribution of Profit in case of Incorporation of a new Company

7. Acquisition Prohibition for Companies that have lost their Capital

8. Expert Examination for the Purpose of Equity Assessment

9. Financial Statements that Cannot Be Taken As Basis for the Merger

10. Content of the Expert Report and Calculation of the Merger Ratio

11. Examination of the Expert Organization

11.1. Expert Organization

11.2. Issues to be mentioned in the Report

12. Content of the Merger Agreement

13. Preparation of a Report by the Board of Directors

14. Consent of the Capital Markets Board

15. Informing the Shareholders

15.1. Notification

15.2. Requirement of Keeping Open to Investigation

16. Approval of the Merger Agreement

17. Registration with Capital Markets Board and Following Transactions

17.1. Application and Registration

17.2. Submission

17.3. Announcement of the Results

18. Capital Amount to be Attained after the Merger

19. Preserved Provisions

20. Enforcement Date

*************************************************************************************************************

MEMORANDUM REGARDING MERGERS OF JOINT STOCK COMPANIES

I. SUBJECT:

Joint stock companies, under the Turkish Commercial Code (TCC), may either merge and operate as a new joint stock company or may acquire one or more other joint stock company or companies and merge all such acquired companies under a single existing joint stock company. In addition to the TCC, provisions of communiqués issued and effectuated by the Capital Markets Board (CMB) provide further criteria for mergers and acquisitions of public joint stock companies (PJSC).

This memorandum summarizes provisions of Turkish laws and regulations regarding mergers and acquisitions of companies.

II. PROVISIONS OF TURKISH COMMERCIAL CODE:

Provisions in the TCC indicate that joint stock companies may be dissolved in various ways, including through an acquisition of one company by another or through the merger of more than one company under a newly incorporated company.

According to Prof. Dr. Ünal Tekinalp (The Law Regarding Partnerships and Cooperatives, 8th Edition, No: 107, Istanbul):

"In order to actualize a merger of multiple commercial partnerships, such merging commercial partnerships are required to merge their assets. Such merger of assets sometimes result in the dissolution of all merging commercial partnerships and sometimes only the company or companies merging into an existing other company dissolve, leaving in existence only the company into which the others merged. These differing outcomes are the consequences of two different types of mergers. The commercial partnership into which the other company or companies merge is called the acquiring company and the partnership which dissolves as a result of the merger is called the acquired company."

At this point, first of all, it would be helpful to mention in summary the two ways indicated by the TTC by listing the relevant transactions:

(i) In mergers by way of acquisition the following shall be transacted in order:

  • Favorable resulting of the negotiations between the Partnerships to be merged

  • Approval of the accounts and evaluation upon a court investigation1

  • Execution of the merger agreement

  • Capital increase in the acquiring company and determination of the shares of the shareholders of the merging company

  • Approval of the merger agreements by general assemblies of the parties

  • Registration and announcement of the merger decision

  • Registration and announcement of the dissolution of the acquired company

(ii) In mergers by incorporating a new company the following is required, in schematics:

  • Reaching an agreement as result of the negotiations regarding the merger

  • Evaluation of the assets of the merging companies - who are merging for capital in kind - by the court

  • Preparation of the articles of association of the new company, and obtaining permission for "companies whose incorporation and amendments of the articles of association are subject to permission of the Ministry" as per the provisions of the circular order sent to the Trade Registry offices after June 17, 2003 by the Ministry of Industry and Commerce upon the amendment of Article 273 of the TCC by Law numbered 4884

  • Preparation of the merger agreement

  • Approval of the merger agreement

  • Incorporation of the new company

  • and, registration and announcement of the decision regarding the dissolution of the merging companies

It would be appropriate to focus on these issues according to the provisions of Law:

1. Merger By Way of Acquisition:

Pursuant to Article 451 of the TCC, a joint stock company may acquire another joint stock company together with all of its assets and liabilities. The following requirements must be met for such merger transaction to be valid:

1.1. Call to Creditors:

The Board of Directors of the acquiring company is required to call the creditors of the acquired company in other words, the dissolved company, to identify themselves as a creditor.

1.2. Separate Management of Assets:

Until the debts of the acquired company are secured or paid off, the acquiring company is required to manage separately the assets of the acquiring company and the assets of the acquired and dissolved company.

1.3. Joint and Several Liabilities:

The members of the Board of Directors of the acquiring company become jointly and severally liable against creditors for the management of the assets of the dissolved company.

1.4. Court with Jurisdiction Remains Unchanged:

In order to facilitate the needs of creditors, one of the provisions of the TCC establishes that during the period in which the assets of the acquired and acquiring companies are separately managed, the court with personal jurisdiction over the acquired company before its dissolution, therefore the place where any necessary court procedures take place, remains the court with jurisdiction over the separately managed assets of the acquired company.

1.5. Priority of Creditors of Dissolved Companies:

Assets of the acquired company shall be considered to belong to the acquired company for the purpose of the relationship between the acquired company’s creditors and the acquiring company’s creditors. In the event the acquiring company becomes bankrupt, the assets of the acquired company shall be deemed a separate estate in bankruptcy from the acquiring company’s assets and bankruptcy estate.

1.6. Validity of Merger of Assets:

The assets of the acquired company and the acquiring company may only merge, and the merger of the acquired company into the acquiring company shall only be deemed complete, after all creditors of the acquired company are identified and the remaining balance of the net assets are ready for distribution to the shareholders of the acquired company.

1.7. Registration of Dissolution:

The dissolution of the acquired company must be registered with the relevant Trade Registry.

1.8. Delivery of Shares:

Upon registering the dissolution of the acquired company with the relevant Trade Registry, the acquiring company must deliver shares to the shareholders of the dissolved company in accordance with the terms and conditions of the merger agreement.

2. Incorporation of a New Company:

The incorporation of a new company in which two or more companies merge is called a combination. According to Article 452 of the TCC, "assets of more than one joint stock company may be transferred to a newly incorporated joint stock company." The transfer of assets of the merging companies into a newly incorporated company may occur without the dissolution of the merging companies.

The following procedures are required for the incorporation of the new company into which other companies are to be combined, and such requirements are in addition to the requirements for incorporation of a new company under the TCC.

2.1. Issues to be Determined in Merger Agreement:

Companies who are parties to a merger agreement, and whose signatures are properly notarized, shall indicate in a merger agreement that the companies have:

  • merged;
  • prepared an articles of association for the newly incorporated company;
  • undertaken to subscribe all of the shares of the newly incorporated company;
  • transferred the assets of the existing companies as capital into the newly incorporated company; and
  • determined the legally required corporate governance bodies of the newly incorporated company.

2.2. Consent of General Assembly:

The general assemblies of each of the merging companies shall approve the merger agreement.

2.3. Registration of New Company:

The Articles of Association of the new company incorporated upon the consents of the general assemblies of the merging companies shall be registered with and announced through the relevant Trade Registry, in accordance with the procedures for incorporation of all companies.

2.4. Delivery of New Shares:

Following the registration and announcement of the articles of association of the new company, the shares of the new company shall be delivered to the shareholders in place of the shares of the dissolved company, in accordance with the merger agreement.

3. Certain Common Provisions:

  • According to the TCC, merger is only possible between companies of the same kind. Accordingly, limited companies may only merge with/into other limited companies and commandite (special limited partnership) companies may only merge with/into other commandite companies.2
  • The assets of the acquired company merges automatically and in entirety into the assets of the acquiring company and are transferred to the acquiring company with all of their legal rights and liabilities (e.g. total subrogation). Registration, assignment, and other such procedures are not required for such transfer of assets.
  • As a result of such subrogation, the acquiring company becomes the successor of the acquired company with regard to the latter’s legal rights and liabilities.
  • Neither cooperation of multiple companies without the merger of their respective assets, nor their acceptance of one of the cooperating companies as their leader, shall be deemed as a merger.

III. MERGERS OF PUBLIC JOINT STOCK COMPANIES:

1. Provisions of the Law:

According to the Capital Market Law No. 2499, as amended by the Law No. 4487, "public joint stock companies (PJSC) are companies whose shares either have been offered to the public or are deemed to have been offered to the public." Article 16/A of this Law authorizes the CMB to issue regulations in order to establish control over the capital and administration of PJSC, protect minority investors (shareholders), and enlighten the public by issuing regulations on the following matters:

  • Calls to shareholders in an attempt to collect shares;
  • Requesting voting proxies, also through calls to shareholders, to be used at general assemblies;
  • MERGERS and ACQUISITIONS, share transfers and capital increases causing any significant change in share distribution of a PSJC; and
  • Material events and developments affecting the value of securities.

Since, under the Capital Market Law, the CMB is deemed authorized "to regulate and supervise the reliable, clear and determined operation of the Capital Market in order to protect the rights and benefits of the investors and to enable the public to participate broadly and effectively in the economic development of the country by investing their savings in securities," the laws and regulations regarding PJSC include several provisions regarding mergers and acquisitions of and by any PJSC permitted by the CMB. Accordingly, it is apparent that the CMB is only enabled by the relevant laws to issue regulations regarding public offering of PJSC and lacks authority to issue regulations for joint stock companies in general.

2. Provisions of the Communiqué:

Capital Markets Board, with the Communiqué Regarding the Procedures of Merger Transactions, Series: I, No: 31 as published in the Official Gazette dated July 14, 2003, regulates the procedures for mergers by way of acquisition and incorporation of a new company WHERE AT LEAST ONE OF THE PARTIES IS A PUBLIC JOINT STOCK COMPANY (=PJSC). The said procedures are summarized in the section below.

3. Adoption of a Preliminary Resolution for the Merger:

Merger transactions begin with the board resolutions of the merging parties. In practice, a resolution expressing the positive approach of the board of directors about the merger is generally the basis of authority for the directors of such company to begin the merger transactions.

It is also possible for the board of directors to convene the general assembly in order to determine a "tendency" about the merger which is obviously an issue of significance. In case the companies that consider being a party in such merger wish to pass a resolution of "request", for the purpose of improving mutual trust by submitting the issue once to their general assemblies, general assembly:

  • after establishing the merger terms, may resolve that the merger procedures shall begin and the merger agreement shall be prepared

  • or, may authorize the board of directors about the merger

4. Determination of the Financial Situation:

In determination of the financial statements that will be taken as a basis for the merger, the following three matters shall be considered:

4.1. Conformity of Financial Statements with the Legislation:

In mergers, the most important data for the merging companies are the "financial statements" that will be taken as basis for the merger transaction. It is required that such financial statements are prepared in accordance with the regulations of the Capital Markets Board (the "CMB"). As per (Communiqué Regarding the Rules and Principles on Financial Statements and Reports in Capital Markets) numbered XI/1 of the Capital Markets Board, as published in the Official Gazette dated January 29, 1989 and as amended several times, companies that are subject to Capital Market Law (=CML), "whose shares either have been offered to the public or are deemed to have been offered to the public", while preparing and presenting to the persons concerned the financial statements and reports that they are required to prepare, shall apply the specified rules and principles.

Communiqué numbered XI/1, mentioning the terms (i) continuity of the corporation, (ii) periodic nature, (iii) consistency, (iv) prudence, (v) full explanation, (vi) importance, (vii) social liability, (viii) neutrality, (ix) priority of the capital, (x) to have a personality separate from the shareholders, (xi) common money standard, (xii) and cost not obligating the accountants to make continuous audit adjustments for the changing market prices, as the "fundamentals of accounting", and (continuity of the corporation), (periodic nature) and (consistency) also as the "basic hypothesis of accounting", provides that, -in case otherwise provided- such basic hypothesis shall be taken as basis in the financial statements and reports. Therefore, the applicability of the financial reports expressing the (balance and income sheets together with their footnotes, and other financial statements attached thereto) and (annual policy statements and audit reports) in the merger, depends on their conformance with the Communiqué numbered XI/1 of the CMB.

4.2. Inflation Adjusted Financial Statements:

Companies shall comply with the financial statement preparation formats in high inflation periods, which is defined by (Communiqué Concerning the Terms and Procedures regarding the Adjustment of Financial Statements in High Inflation Periods) numbered XI/20, as published in the Official Gazette dated November 28, 2001, as; "in case, the price index number on the annual balance date exceeds twice the price index number at the beginning of the third previous fiscal period –including the said fiscal period– , and the price index number on the balance date of the relevant period increases by a ratio of 10% or more compared to the beginning of the fiscal period, high inflation period shall start as of the current annual fiscal period . Such period shall end when the price index number on the annual balance date is less than twice the price index number at the beginning of the third previous fiscal period –including the said fiscal period-".

Consequently, in such periods when companies are obligated to prepare inflation adjusted financial statements as a requirement of law, they are obligated to prepare their financial statements in accordance with the "rules of inflation period".

4.3. Private Independent Auditing:

4.3.1. Necessity:

According to "Communiqué Regarding Independent Auditing in Capital Market" published in Official Gazette dated March 4, 1996, private independent auditing is; "auditing of financial statements prepared by companies and similar capital market corporations during application to Capital Markets Board for the public offering of the capital market instruments, or MERGER, split-off, TRANSFER or liquidation. In private auditing, financial statements to be audited shall be prepared as of the end of the month in which the independent auditing work has started…Such work shall be deemed to have started on the date of execution of the independent auditing agreement". In mergers, the requirement of private independent auditing of the financial statements has also been stipulated in the Communiqué numbered I/31. The period between date of the financial statements that will be taken as basis for the merger and date of the general assembly in which the merger agreement will be finally executed shall NOT EXCEED SIX MONTHS. Such time restriction might be construed as serving the purpose of completing the merger as quick as possible.

4.3.2. Exception:

If the financial statements that will be taken as basis for the merger are continuously being subject to independent audits, (private independent auditing) is not required. As it is known, according to Communiqué Regarding Independent Auditing in Capital Market and numbered X/16, continuous audit means, "the audit which is made every year and includes all kinds of necessary audit techniques".

5. Circumstances Requiring New Financial Statements:

Merging companies are required to (i) prepare NEW FINANCIAL STATEMENTS, (ii) have their independent audits made and (iii) take such "new financial statements" as basis in the merger transaction, if the merging companies CARRY OUT TRANSACTIONS;

  • that are outside the scope of their main field of activity

  • and that affect the equities and financial statements that are taken as basis for the calculation of merger ratio.

The 3 periods during which the above mentioned principle shall be applied, are provided in the Communiqué as follows:

- In mergers by way of incorporation of a new company: until REGISTRATION OF THE NEW COMPANY,

- In merger by way of acquisition: until REGISTRATION OF THE CAPITAL INCREASE,

- In such cases capital increase is not required: until REGISTRATION OF THE GENERAL ASSEMBLY IN WHICH THE MERGER AGREEMENT IS EXECUTED.

6. Adoption of a Resolution Regarding Distribution of Profit in case of Incorporation of a new Company:

As per the provisions of the Communiqué, companies that will cease to exist as a result of the merger shall adopt general assembly resolutions regarding distribution of profit:

  • BEFORE THE FINANCIAL STATEMENT DATE that shall be taken as basis

  • or AFTER the completion of the merger transaction, provided that it is done WITHIN THE PERIOD set forth in the provisions of Capital Market Law regarding distribution of profits.

7. Acquisition Prohibition for Companies that have lost their Capital:

Article 324 of the TCC articulates the measures that shall be taken by the general assembly and courts, in case it appears from the balance sheet that half or 2/3 of the nominal capital are not represented by assets, or the company is in poor financial situation. According to the Communiqué, if it appears in the balance sheet that has been prepared based on the sale price of the assets that, 2/3 of the share capital of a company are not represented; such company CANNOT JOIN THE MERGER TRANSACTION as the "acquiring company".

8. Expert Examination for the Purpose of Equity Assessment:

Equity assessment of the companies that are parties to the merger is done by an (expert report) prepared upon expert examination.

Such expert report shall comprise the following (Note: See Para. No. 10 below):

  • equity assessments

  • merger and conversion ratios

  • In (merger by way of acquisition), amount of capital increase and the calculation methods for such increase amount

  • In (incorporation of a new company), capital amount of the company that will be newly incorporated and the terms of calculation

9. Financial Statements that cannot be Taken as Basis for the Merger:

Even if the private independent audit report which is prepared on the financial statements regarding the merger expresses a POSITIVE OPINION, in case Capital Markets Board does not accord with such opinion or has already expressed CONDITIONAL OPINION in the report, financial statements that are AMENDED by the expert and APPROVED by the independent auditor shall be presented and expert opinion shall be prepared accordingly.

In case the financial statements that shall be taken as basis for the merger do NOT INCLUDE ANY OPINION or include a NEGATIVE OPINION, merger transaction cannot be carried out according to the said financial statements.

10. Content of the Expert Report and Calculation of (the Merger Ratio):

Since merger means the transfer of the assets of one or more companies to one of the existing companies or to a newly incorporated company and thereby the merger of their assets, shareholding ratios of the company or the companies which have been terminated by dissolution, in the company in which they have merged into, shall be determined according to a ratio. Merger ratio is determined by "the method adopted by the partnerships" party to the merger. This measure adopted by the partnerships party to the merger constitutes the merger ratio. In practice, in the process of merger, mostly (the method of equity) is applied, and in certain cases (a method other than the method of equity) is preferred. In certain cases, the merger ratio can be determined by considering the stock exchange prices. In case where (the method of equity) is preferred in the merger, the process shall advance only according to this method. In the application of a method other than the said method, it is required that merger ratios calculated according to THE METHOD OF EQUITY as well as "the other preferred METHOD", CHANGING rates and AMOUNT OF CAPITAL following the merger shall take place in THE EXPERT REPORT. The ratio that is derived by dividing the capital that will be increased or the capital that will be newly foreseen, by the capital of the partnership that will be taken over, shall be the (merger ratio). It is required that the said ratio shall be mentioned in the expert report.

The Communiqué sets forth THREE CONDITIONS in order for the determination of merger ratio by considering the stock exchange prices:

  1. Rate of the sum of the NOMINAL values of the shares that are offered to public, to the nominal capital of the company SHALL BE at least 25% and such shares SHALL BE TRADED IN THE STOCK EXCHANGE,
  2. As the stock exchange price, ARITHMETIC AVERAGE of the ADJUSTED WEIGHTED AVERAGE prices of the past year shall be taken,
  3. CHANGES that may be brought about by Capital Markets Board and ADDITIONAL CONDITIONS that may be set forth shall be fulfilled.

While merger ratio shall be applied through the MARKET PRICE of assets, the immovable assets shall be valued by the immovable valuation companies which take place in Capital Markets Board’s list.

11. Expert Institution Examination:

Equity examination, other than the court-appointed expert examination, may also be done by an EXPERT INSTITUTION.

11.1. Expert Institutions:

In the Communiqué, the following have been specified as "expert institution":

  • "Independent auditing institutions" determined by Capital Markets Board,

  • "Consultancy Companies" operating within the scope of license, know-how and similar agreements which have been executed with foreign companies with whom the above mentioned institutions have membership agreements.

  • "intermediaries" who possess both (public offer intermediation) and (investment consultancy) competencies,

  • banks who do not accept deposits

11.2. Issues That Will Be Mentioned In the Report:

The expert institution report shall include the following:

  • equity assessments of partnerships
  • legal basis for choosing of the method that will be used for the process of merger
  • according to each of the THREE METHODS that may be used in the merger,
  • amount of capital increase that will be increased during takeover and form of calculation,
  • amount of capital of the company that will be newly incorporated and form of calculation,
  • opinion on whether or not the merger ratio is reasonable and fair,
  • explanation regarding the sufficiency of the methods,
  • opinion about the problems regarding the methods, if there are,
  • in the method of merger, the method of EQUITY and AT LEAST TWO METHODS together with such method and MERGER RATIOS that will be calculated according to the said methods,
  • legal basis for the choosing of one of the methods,
  • (changing rate), meaning the share ratio that the partners of the partnerships party to the merger –taking merger rate into consideration- will take as a result of merger, to an existing share,
  • the amounts of capital following the merger,
  • issues that shall be mentioned in the expert report.

12. Content of the Merger Agreement:

Merger agreement is prepared by the board of directors of the merging companies. The said agreement sets forth the condition that, at the minimum, the below elements shall be included in such agreement:

  • general information about the merging parties

  • provision indicating that during acquisition, the assets shall be transferred to the assignee "without liquidation" and as a "whole"

  • provision indicating that during the incorporation of the new company, the assets of the dissolved companies shall be transferred to the new company "without liquidation" and as a "whole"

  • the dates and numbers of the expert reports, expert institution reports and of the consent of Capital Markets Board

  • dates of financial statements taken as basis for the merger

  • in acquisition, (amount of capital increase) or (capital of the new company together with changing rates); (shares and fraction receipts that will be given to the partners)

  • information about the condition of beneficial ownership and concession bills

  • terms indicating that tax loans will be subscribed and unpaid debts will be paid

  • terms regulating the issues that will take root from merger and will appear in case of non-fulfillment of obligations

  • draft of the articles of association

  • dates of general assemblies’ meetings, and the imperative provision regarding the invalidity of merger in case of not meeting

  • explanation regarding the dissolution dates of the companies and effective date of merger,

  • terms of submission of new shares and date of obtainment of profit share,

  • SPECIAL advantages provided to organs of the company, expert and expert institution.

13. Drawing Up of Report by Boards of Directors:

Boards of directors of merging companies are obligated to set up a report explaining in detail the issues bellow. The Report includes:

(i) merger ratio,

(ii) meaning of the terms of the merger agreement,

(iii) legal and economic bases for merger,

(iv) other issues effecting valuation.

14. Approval of the Capital Markets Board:

PRIOR TO the general assembly meetings during which the merger agreement will be accepted, CONSENT of the BOARD shall be obtained for compliance with the LAW, by applying to the Capital Markets Board.

15. Providing Information to Partners:

15.1. Announcement:

An ANNOUNCEMENT and MERGER AGREEMENT that has been approved by the Capital Markets Board shall be announced at least 30 DAYS BEFORE the general assembly meeting; moreover, if any one of the shares are being dealt in on the stock exchange, both documents shall be sent to Istanbul Stock Exchange. The stock exchange will issue the said documents in the "Bulletin" on the WEB page. Announcement for the shares that are not being dealt in on the stock exchange shall be made on the WEB page of the Capital Markets Board until the registration of the merger.

15.2. The Necessity of Allowing the Documents to be Examined:

As of 30 DAYS BEFORE the general assembly meeting during which merger will be accepted, the documents below will be kept AVAILABLE FOR EXAMINATION at the partnership center and its divisions:

  • financial statements of the last three years

  • independent audit reports and board of directors reports

  • independent audit reports on financial statements taken as basis for merger

  • expert report

  • expert institution report

  • report of Board of Directors including the legal bases for merger

  • text of announcement

  • "financial statements of the last THREE MONTHS" prior to the general assembly of consent

  • estimated financial statements of the THREE YEARS following merger

  • estimated opening balance following merger.

16. Approval of the Merger Agreement:

General assemblies may accept the merger agreement AFTER the approval of the Capital Markets Board.

The assignee company issues the "resolution regarding acquisition and increase of capital".

The transferee company issues the "resolution regarding acceptance of transfer and, DISSOLUTION".

Companies conjoining in the new partnership, issue the "resolution regarding merger and DISSOLUTION".

In PRIVATE meetings, CONCESSIONAIRES, beneficial owners, bond holders and other types of loan owners approve the issued resolutions.

17. Registration by the Capital Markets Board and Subsequent Transactions:

17.1. Application and Registration:

Shares are registered as the result of the duly made application to the Capital Markets Board within FIFTEEN DAYS following the general assembly meetings.

17.2. Delivery:

Following the process of registration, taking into consideration the laws and regulations regarding the registration of capital market instruments, depending on whether the companies are subject to the capital stock system or the registered capital system, shares shall be delivered to their owners.

17.3. Notification of the Results:

The below documents shall be submitted to the Capital Markets Board IN SIX BUSINESS DAYS:

  • TTRGs (Turkish Trade Register Gazettes) regarding general assembly, increase of capital, registration and announcement of amendments in the articles of association, announcement of financial statements of merger, deregistration of dissolved companies from the trade register

  • notarized sample of the merger agreement

  • list of participants of general assemblies

  • texts of announcement

  • samples of gazette in which the distribution and delivery of shares are announced

18. Amount of Capital That Will Be Attained Following the Merger:

The formulas of the amount of capital that will be attained following the merger are indicated in articles 17 and 18 of the Communiqué of the Capital Markets Board, numbered (I/31).

19. Reserved Terms:

Terms of "other laws and regulations", by which any one of the partnerships party to the process of merger is bound, are reserved.

20. Effective Date:

Communiqué numbered I/31 has become effective on the date of 14 July, 2003.

NOTE: (Memorandum Regarding Mergers and Acquisitions) prepared on October / 2000 has been renewed, due to the changes brought about in the Laws and Regulations on Capital Market in 2003, as (Memorandum Regarding Mergers of Joint Stock Companies).

1. The Law does not directly stipulate the court approval. However, it is favorable to apply such method in order to prevent any future problems and for the comfort and benefit of the parties. Besides, in Article 150/3 of the TCC, it is provided that, “Each creditor of the merging companies may apply to the competent court and object to the merger within three months after the publication”. Likewise, if we consider the issue as a ( new incorporation), the provision of Article 303/2 of the TCC stating that, “where contribution in kind or aquisition by the company of an existing undertaking or certain assets has been deemed as an obligation, the experts of appraise shall be appointed by the court” shall put forth the purpose and essence of the Law. In light of the said provisions, it should be out of question for the competent court not to handle an issue that can be brought before a court.

2. Prof. Dr. Unal Tekinalp states in his book called "Law of Corporations and Cooperatives" that, joint stock companies and comandite companies with share capital are considered to be of the same kind. (8th edition, p.112).

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.

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Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions