Turkey: Amendments To The Turkish Commercial Code By Omnibus Law No. 6552

Last Updated: 4 November 2014
Article by Tuna Çolgar

A number of amendments have been made to the Turkish Commercial Code ("TCC") by Articles 131, 132, 133 and 134 of the Omnibus Law No. 6552 adopted by the Turkish Grand National Assembly on September 10th, 2014. The most outstanding of these amendments are the addition made to Art. 371 relating to the representative authority of companies and the amendment made to Art. 629 concerning limited liability companies with a reference to the paragraph added to Art. 371.

The paragraph added to TCC Art. 371 by Omnibus Law No. 6552 reads as follows;

"(7) The board of directors, with the exception of certain representatives referred to above, may appoint non-representative members of the board of directors or persons bound to the company by a labor contract as commercial representatives with limited representative authority or other commercial assistants. Powers and duties of persons appointed in this manner shall be clearly stated in the internal directive issued in accordance with Art. 367. In such a case, the internal directive shall be registered and announced. Commercial assistants or other commercial representatives shall not be appointed with the internal directive. Commercial assistants or other commercial representatives authorized by this paragraph shall be registered in the Trade Registry and announced. The board of directors shall be liable jointly and severally for any damages caused by these persons towards the company or third persons."

New regulations are introduced by the 7th paragraph added to Art. 371 concerning the function and scope of the internal directive regulated under Art. 367 TCC. According to the added paragraph, the board of directors may appoint non-representative members of the board of directors, or persons bound to the company by a labor contract as commercial representatives with limited authority, or other commercial assistants. This act of the board of directors and the powers and duties of the appointed persons shall be explicitly reflected in the internal directive issued in accordance with Art. 367. Following this addition made to TCC Art. 371, a new opportunity has arisen for the companies that would like to impose different kinds of limitations on the representative authorities of the company, but which are not able to do so by a signatory circular. Companies that wish to introduce a limitation or categorization for its representative authorities are able to do so through a registered and announced internal directive. The legislator aims to make the internal directive a means of proof by making its registration and announcement obligatory.

At this point, the reliability on trade registry records (the constructive function of the trade registry) must be analyzed. The addition of the 7th paragraph to Art. 371, enabling the thematic and pecuniary representative limitations; and determination of the appointed representatives in a registered and announced internal directive are important with regards to the fact that the company is bound by the transactions concluded with third parties or its right to recourse to its representative that carried out the transaction. In our opinion, with this new regulation, where transactions concluded with third parties on behalf of the company by a non-representative member of the board of directors or persons bound to the company by a labor contract as commercial representatives with limited representative authority or other commercial assistants, that are acting upon the internal directive issued in accordance with the board of directors resolution; the parties to the transaction will be bound by the limitations introduced with the internal directive as a result of the constructive function of the Trade Registry. However, in any case, in order to prevent any conflict, it is advised that the board of directors resolution, concerning the distribution and limitations of authority, and the Trade Registry Gazette issue in which the internal directive is announced must be shared with the counter party during the transactions in accordance with the constructive function of the Trade Registry, which causes the "ought to know" principle to be utilized.

The reason underlying the need to differentiate between "company representatives" and "the non-representative members of the board of directors or persons bound to the company by a labor contract" is evident in the preamble of the TCC. As explained in the preamble of Art. 367 TCC, the TCC differentiates between the right to execute and representative authority. In this case, the board of directors is split into two groups as "executive" and "non-executive" members.

The 7th paragraph added to Art. 371 enables thematic and pecuniary limitations for commercial representatives or other commercial assistants who will be appointed by the board of directors, and selected within the non-representative members of the board of directors or persons bound to the company by a labor contract, other than the company representatives who are vested with execution and representation authorities. However, in accordance with the 3rd paragraph of Art. 371, such limitations shall not be applicable for representatives with execution and representation authorities.

"The board of directors shall be jointly liable for all types of damages of the company and third parties, created by these persons." is the last sentence of the aforementioned 7th paragraph. This sentence should be evaluated in unison with the second paragraph of TCC Art. 553, which reads as follows; "The bodies or persons transferring a duty or power emanating from the Code or from the articles of association to others on a legal basis are not liable for their actions and decisions, providing that they prove that they displayed enough care while choosing those persons assigned to these functions and powers."

In order for the aforementioned regulation on joint stock companies to be applied to limited liability companies, a third paragraph was added to TCC Art. 629 by the Omnibus Law numbered 6552:

"(3) Regarding the appointment of the persons bound to the company by a labor contract as commercial agents or other commercial assistants by the company managers, Art. 367and Art. 371/7 shall be applied to the limited liability companies by analogy."

Thereby, Art. 367 and Art. 371/7 shall be applied to limited liability companies by analogy in the matter of the appointment of persons bound to the company by a labor contract as commercial agents with limited authorities or other commercial assistants, by the managers of limited liability companies.

In addition to the abovementioned regulations, Omnibus Law No. 6552 grants an extension of time and further opportunities, in order for companies to adopt the rules regulated under the TCC by the effective date of 01.07.2012 via transitional provisions.

In this context, the wording: "As from the entry into force of this Code" in the TCC Temporary Art. 7, and "within two years starting from the effective date of the Code" in the sub clause (b) of the same article are amended as "until the date of 01/07/2015". Thus, in such a case where a circumstance laid out in temporary Art. 7 occurs, such as company capital not being decreased to the point of the minimum values, despite the fact that the liquidation process has been initiated, the inability of the removal of the company from the Trade Registry due to the lack of general assembly meeting or, general assembly meetings not having been conducted over the last five years, the effective period of the provision enabling joint stock and limited liability companies and cooperatives to liquidate without complying with the liquidation provisions stated in the Code has been extended from 01.07.2014 until 01.07.2015.

Additionally, via the regulation of TCC Temporary Art.10, an extension of time is granted to the companies in order for them to achieve the minimum amount of share capital stated in the Code.

"Temporary Article 10- The dissolution process shall not be executed where the companies obliged to increase their capital in accordance with TCC provisions have not yet increased their share capital by 14.02.2014, if such companies meet the capital increase conditions within three months following the publication date of this provision. The registration of companies with the trade registry, which were formerly removed from the trade registry due to the fact that they have not performed a capital increase shall take place ex officio, if the companies apply for a capital increase within the abovementioned period."

In conclusion, it can be seen that the parliamentary committee's statements regarding the TCC eventually becoming a code, which satisfies the needs of commercial life via dynamic amendments compatible with the needs of commercial practice have been actualized. By virtue of these amendments, the need for distribution and limitation of the representative authority within company officials is satisfied via the addition of a new paragraph to Art. 371. Additionally, temporary articles grant extended opportunities for companies to adapt themselves to the TCC.

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.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Gur Law Firm
 
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 Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Gur Law Firm
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

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