Turkey: Notification And Registration Obligations For Groups Of Companies

Last Updated: 19 November 2013
Article by Revan Sunol

As known, groups of companies were not regulated under the former Turkish Commercial Code numbered 6267. Regulations regarding the assurance of the independence of the subsidiary against the parent company, and transparency in the market regarding groups of companies have been included within the Turkish Commercial Code numbered 6102 ("TTC") so the law could regulate the necessities of commerce.

Art. 195 to 210 TCC and 105 to 107 of the Trade Registry Regulation ("TRR") constitute the body of legislation regarding groups of companies. These regulations define the notions of control and group of companies, as well as implementing certain obligations and responsibilities. It should be noted that TRR provisions are for the most part parallel to TCC provisions, but include certain provisions to which special attention must be paid.


Basic notions regarding group companies are encompassed in TCC Art. 195. Pursuant to Art.195, control may be realized contractually or through capital contributions to a company. If a commercial company, directly or indirectly:

- Holds the majority of the voting rights in another commercial company;

- Has the right to appoint a number of directors, which form a majority allowing the adoption of a resolution ofthe managing body of another commercial company pursuant to the articles of incorporation (or other equivalent of such document);

- Holds the majority of the voting rights by means of an agreement on its own or together with other shareholders;


if a commercial company controls another commercial company contractually or by any other means, then the first company is the parent company and the second is the subsidiary.

Where control is attained via one or more affiliated companies this shall constitute indirect control.

Art. 195 also provides a legal presumption as to the existence of control, which may be proved false. According to said provision, the possession of the majority of a company's shares or an amount enabling the adoption of resolutions that implement the management of such company shall indicate control. There are no specifications as to what such resolutions which implement the management of a company may be.

Group of Companies

A group of companies consists of one commercial company and at least two commercial companies that are directly or indirectly controlled by it. Art. 195 TCC is not clear as to whether one parent company and one subsidiary company would be sufficient to constitute a group of companies. However, this is expressly regulated under TRR, which determines that a group of companies must contain one parent company and at least two other subsidiaries.

It must be noted that, pursuant to Art. 195 TCC and Art. 107 TRR, an enterprise which is not a commercial company with two or more direct or indirect subsidiaries shall also form a group of companies in which the parent shall be the enterprise.

Obligation of Notification and Registration

The TCC stipulates certain obligations in order to preserve the independence of the subsidiary vis-à-vis the parent company. One of these obligations is found in Art. 198 TCC which concerns obligations of notification and registration which arise in case of share transfers.

According to Art. 198 TCC, share transfers, which directly or indirectly result in the shares possessed in the capital of a company to exceed or drop below 5%, 10%, 20%, 25%, 33%, 50%, 67% and 100%, must be notified to the competent authorities and to the company whose shares are acquired.

In the TCC's preamble, it is stated that criteria such as minority limits, cross participation limits, presumption of control etc. were used to determine the above-mentioned limits. Depending on the case, the competent authorities may be private institutions or governmental institutions such as the Capital Markets Board of Turkey, Banking Regulation and Supervision Agency, Turkish Competition Authority and the Undersecretariat of Treasury.

According to TRR Art. 107/5, a company or enterprise whose shares exceed or drop below the limits must notify in writing the company whose shares are subject to transfer, within 10 days as of the transfer. Companies which receive such notifications must have them registered with the relevant trade registry and published in the Trade Registry Gazette within 10 days from the date of receipt.

It must also be pointed out that share transfers in the above mentioned percentages must also be accounted for in annual reports and audit reports, and disclosed on the web site of the company.

A similar obligation of notification exists for directors of companies or undertakings: directors are obliged to notify the company where they are director for the transfer of such company's shares resulting in the amount of the shares owned being above or below the limits. This notification obligation shall also apply for the transfer of shares owned by their spouse, their children and companies wherein the director himself, his spouse, or his children own more than 20% of the shares.

In the case of a transfer below or over the limits, it must be remembered that the entire transaction shall be notified, not just the part exceeding the limit.

In practice, the company, whose shares have exceeded or dropped below the mentioned limits, notifies the company whose shares are transferred, and the latter notifies the relevant trade registry. This notification is then registered with the trade registry and published in the Trade Registry Gazette.

According to TRR Art. 107, in the presence of a notification for more than one indirect subsidiary, it is possible that only one of these companies make a single notification for all of the enterprises or companies that indirectly exceed or drop below the limits. For instance, if the control between the parent company and its subsidiary is realized through other subsidiary companies, and if there is a change in the shareholding of more than one company because of a single transaction, this may be notified by just one of the subsidiaries for the entire group.

Non-Fulfillment of the Obligation of Notification and Registration

Not applying to the trade registry within the prescribed time shall result in the shareholding rights arising from the relevant shares being suspended. This means voting rights cannot be used either. As a result, if such voting rights affect the quorum of a resolution that has been adopted without the necessary notification and registration, such resolution may be rendered invalid. However, the lapse of the prescribed period shall not nullify such shareholding rights, but merely suspend them. Thus, the fulfillment of the obligation of registration shall enable the usage of shareholding rights.


The obligation of notification is important as it promotes transparency in the market by disclosing the shareholding status, and is declaratory especially in consideration of potential liabilities. However, non-fulfillment of this obligation can even result in the invalidity of companies' decisions. In practice, it has been observed that problems occur with the registry procedure, for example the trade registry rejecting applications for registration on the grounds that the 10 day period has lapsed, therefore causing the suspension of shareholding rights for long periods of time. Consequently, the fulfillment of the obligation is important for the prevention of loss of rights, which may especially occur during this period of transition.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

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